Universities in Portugal are faced with having to refund students' tuition fees they paid illegally, following a council of rectors' ruling.

The mistake - a misinterpretation of the 1994 tuition fees law - could cost the universities some Esc3 billion (Pounds 12.8 million) and a lot of administrative bother.

Managers will have to revise their lists of students exempted from fees and those in fee debt, as well as setting new deadlines for candidates applying for exemption on welfare grounds. Universities could still end up short of cash if graduates leave without paying their debts.

To add to the confusion there are fears that this October's general election may produce a government that decides to revoke the tuition fees law given the amount of controversy it has generated.

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Until its last meeting, the rectors' council, CRUP, considered that students on scholarships who failed a year lost their automatic right to fee exemption.

But a student group at ancient Coimbra University decided to challenge this interpretation. It got the rectors to agree to accept the view of reputable lawyer Vieira da Andrade.

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He said that the rectors were not interpreting the law literally enough. The article stated that every student who received a state scholarship was exempt from paying tuition fees. But, as students who failed a year lost their right to a grant, rectors had assumed they also lost their right to pay no fees.

Vieira da Andrade argued that the article needed to be interpreted "as a rule attributing the right of exemption to scholarship students, without excluding the possibility of conceding fee exemptions to non-scholarship students".

The rectors agreed and ordered universities to stick to this interpretation for next academic year.

But Vieira da Andrade said that students who paid fees because they had flunked a year could legally demand a refund. If that money no longer exists they would then become creditors of the university.

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They can also appeal even higher - to the ministry of education, from whose offices the mix-up emanated.

Universities that have already published fee lists of paid-up and debtor students will have to produce a reprint. Others, such as Coimbra and some Oporto faculties, whose lists were held up because of delaying tactics by student applicants opposed to tuition fees, will also be producing revisions.

New lists are not expected until September, which means universities could find themselves unsuccessfully chasing students who finish their courses in July for payment of fee debts.

Meanwhile, students who are repeating a year will demand exemption from fees.

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