Ministers are set to gamble on a pound;500 increase in grants for students from poor homes easing the passage of the higher education Bill published this week.
Maintenance grants to be introduced later this year are likely to be increased to pound;1,500 when top-up fees arrive in 2006. At the same time, student loans will rise to meet the cost of living calculated by the Government at pound;4,485 outside London and pound;4,685 a year in the capital, excluding housing costs.
Any outstanding debts from the fees will be written off after 25 years.
Repayments will only be made when graduates' salaries exceed pound;15,000.
The Government is hoping that the concessions will be sufficient to persuade Labour rebels, including former ministers, to vote for the Bill during its second reading, scheduled for January 27. Almost 160 have signed an Early Day Motion demanding that alternatives to variable fees be examined before more legislation is debated.
The concessions represent a partial victory for universities. The Government is not expected to insist on universities setting aside a certain proportion of fee income for bursaries. There will also be no national bursary scheme.
Ministers expect the extra money for student support to prevent the new universities being disadvantaged.
Taken together, the support package will be worth pound;2,700 a year. The new universities will be expected to find just pound;300 per student per year in bursaries for the least well-off from their tuition fee income.
Meanwhile, the research-dominated Russell Group institutions will not have their tuition fee income confiscated by government to pay for student bursaries at other institutions.
However, the elite institutions will come under the scrutiny of the Office for Fair Access, which will be created by the Bill, to monitor their intake.
The Government is expected to agree to demands for a comprehensive, independent review of the impact of variable fees after the first three years, in 2009.
Ultimately, the Government wants to abolish the means-testing of student loans. Charles Clarke, Education Secretary, is known to be unhappy that 18-year-old students are not treated as independent adults as their parents income is used to assess the level of support available. Mr Clarke will appear before the Commons education select committee next week to be quizzed on the Bill.
Tim Yeo, shadow education secretary said that if the maintenance grant were increased to pound;1,500, as proposed, it would cost an extra pound;150 million, showing Labour's plans do not add up. "The Government's plans for higher education will mean massive extra debt for students, at massive cost to taxpayers, for little or no benefit to universities," he said.