Clarke moves to woo top-up rebels

Charles Clarke is to offer more generous student loans in a bid to buy off the mass revolt by Labour MPs against top-up fees.

In a new concession to the rebels, he will allow students to borrow more money to support themselves while at university and pay it back over a longer period.

The move comes as the Education Secretary prepares to hold a series of crucial meetings with Labour backbenchers to defend his plan to let universities charge up to £3,000 a year in tuition fees.

More generous loans are designed to appeal to students from poorer backgrounds who are worried that they cannot afford the cost of supporting themselves through their studies.

The Government has already promised to reintroduce maintenance grants at £1,000 for the poorest but it has been swayed by a survey showing many students feel they cannot manage without more money.

At present students can borrow up to £4,930 a year at low rates of interest, of which £1,000 is means-tested to go to poorer students.

Repayments begin when they start earning £10,000 and are collected through the tax system. From 2005 they will only start making repayments when they earn £15,000 but this could now rise further because graduates will also have to repay their tuition fees.

"We've had the student expenditure survey, looked at it carefully and we therefore know there are consequences we have to look at," Mr Clarke said.

"The younger people are, the less worried they are. Their parents are much more frightened by the concept of debt."

About 150 Labour MPs are threatening to vote against tuition fees, due to start in 2006, because they say the poor will be put off gaining degrees.

Ministers are launching a new offensive by saying low-income families have benefited in countries which have adopted similar systems to the Government's own proposals. The issue will be put to MPs next month and Tony Blair has admitted it will be a test of his personal authority as Prime Minister.