A win by the Conservatives at the next election could open the door to an upsurge in "no frills", bargain-basement private education, researchers claim.
Tory plans for 220,000 new places in state-funded Swedish-style "free schools" will bring major change to the sector, a report claims.
Parents who might otherwise have opted for private education may opt to send their children to free schools, thereby driving the private sector to introduce `budget' options.
And the changes to planning law and building regulations that would allow the independently run free schools to go ahead could also make it much easier for companies to open private schools for parents on a tight budget.
In Sweden, where free schools have been pioneered, initial outlay has been reduced by using disused offices and other commercial premises and sharing facilities among schools and community groups.
Report author Gavin Humphries told The TES: "If the Government introduced `free schools' it would free up the planning process that has been the biggest barrier to opening up no-frills private schools.
"At the moment there are only 100 private schools charging under pound;6,000 a year. But if someone could nail the low-budget area of the independent school market, they could have it made."
The report, from mtmconsulting, explains that private schools are becoming increasingly polarised between the premier institutions such as Eton and "niche" schools catering for markets such as special needs or girls- only.
The mid-market, he said, is being squeezed by fee rises of 33 per cent in the past five years, way above the 18 per cent rise in income typical of parents who send their pupils to private school.
"For some parents it's not about the playing field or latest theatre facility - they want discipline and great teaching."
The report warns that from 2015, pupil numbers could begin to fall by at least 1 per cent per year if independents do not act to make themselves more affordable.
Private schools' "sacred cows", including small class sizes and the "arms race" towards flashy facilities, would also have to be challenged.
While pupil numbers are forecast to grow to almost 611,000 in 2014, they are predicted to fall to just under 580,000 by 2020, the same as in 1987. Average fees have gone from pound;5,800 per pupil in 1999, to pound;11,250 in 2009.
Mr Humphries said: "Some schools are closing and will continue to close if they don't address the affordability issue."
Lost in translation?
The Tories want to emulate the system pioneered in Sweden where, since 1992, schools have been able to operate outside the state system but receive state funding.
Under their new academies programme, the Conservatives hope to stimulate a "free market" in education, creating 220,000 places in 3,000 privately run, state-funded schools.
Companies, charities, private schools and parent groups could apply to run a school. Planning regulations would be swept aside.
But critics claim the Tory version of "free schools" would be unworkable because, unlike in Sweden, companies running them would not be allowed to make a profit.