The Government is taking legal advice on how to prevent students at some universities being charged tuition fees of more than the official Pounds 1,000 a year.
Universities increasingly fear that the money raised by fees from next autumn will not benefit them, and want to keep their options open.
A briefing paper seen by The TES reveals fraught discussions between the universities and senior civil servants. "It is important to keep the threat of top-up fees on the table, given the lack of assurances that additional funding for higher education will be provided in the short term," says the Committee of Vice Chancellors and Principals' paper.
It adds: "There are signs from discussion with DFEE that the Government is already trying to say that the Pounds 1,000 fee is a university set fee (while saying that universities are not free to change it) rather than a student contribution to a Government introduced-and-set fee."
Universities are already describing top-up fees as "the local fee", on top of "the national fee". One vice-chancellor this week said: "We could argue the case because we are providing a higher quality product."
Sir Stewart Sutherland, principal of Edinburgh University, predicted that varying university fees were almost a certainty. "The genie is now out of the bottle. When you start charging tuition fees you set off down a road where the market will play an increasingly large part."
Another furious battle is going on behind the scenes between the vice-chancellors and the DFEE as to who will collect the tuition fee announced by the Government in the summer.
The DFEE wants the universities to be responsible. But the universities don't want to be seen as debt-collectors. Some 37 per cent of parents currently cannot or will not contribute towards the student grant, and universities fear many parents will not pay the fee - due in full when disposable family income reaches Pounds 35,000.
Either the universities would have to carry the debt, or be forced to exclude students on financial grounds. If they admitted the students, there would be no incentive for anyone to pay. The vexed question of whether parents or students will be legally responsible for paying the fees is still unresolved. In theory, the student registering will be liable, but for under-18s the area is a legal minefield.
"What will we do with about one-third of students whose parents either won't pay or don't pay? " said Iain Crawford, visiting research associate at the London School of Economics and an authority on student finance. "The Government has given no answer.
"They cannot afford any leakage. Either it would mean a shortfall in funds or a drop in student numbers. If the Government really believed in means-testing parents it would make it enforceable in law, but the middle classes would go berserk."
Mr Crawford added: "And if top-up fees are legally prohibited I think some universities will take fewer British students, and more from overseas who pay the full fee."
The universities think students should be charged annually, at the beginning of the academic year, but the DFEE is arguing it should be done termly. The charge will be reviewed every year.
The vice-chancellors say the proposals are "unworkable".
A particular problem is the means-testing of European Union nationals. By law, EU students have to be treated the same way as British students. The Government is proposing that EU students be means-tested by the local education authority where they will reside. As students often arrive at the last minute with no idea of where they are going to live, the authority would have an impossible task.
Meanwhile secondary schools are having to advise parents on their finances. Pauline Cox, headteacher of Tiffin Girls' School, in Kingston, Surrey, told a conference this week: "We have increasingly encouraged parents to think about not just the choice of A-levels, but how they are going to finance their child's education. We have invited the high-street banks in to advise parents. "