The PM may have “no reverse gear”, but he seems to have left himself the option of taking a different road to the much-needed crock of gold for Britain’s universities.

The route he takes will tell us much about how his party now views higher education:whether it believes staying on after school is an entitlement or an investment. In turn its decision may well raise another thorny issue - whether the individual or society is the main beneficiary of higher education.

Both these questions are curiously interlinked. I say “curiously,” because depending on how entitlementinvestment and socialindividual are paired, they can produce different, almost contradictory answers. We could, for example, argue for individual entitlement or social investment, social entitlement or individual investment.

When I was teaching in London comprehensives, like many others, I was keen to encourage able pupils to go to university. Almost all the pupils I taught were the first in their families to consider doing a degree. Back then I viewed university as an entitlement. I thought that no one should be ruled out on the grounds of income and also that enabling such pupils to go on to further study was a way of breaking down rigid social barriers. In so doing I thought I held a left-of-centre position, one of social entitlement, to which top up fees would be anathema. The very thought of them may have made me hesititate from urging pupils to go.

Yet what I never fully acknowledged was that these pupils formed a meritocratic elite. The quality of education they received depended on the fact that the “entitlement” only applied to 15 per cent of the population.

Labour’s desire to ensure that at least half the eligible population go on to further study aimed to change all that. To this extent it is trying to democratise higher education, arguing that a 21st-century economy needs a highly skilled workforce. Such an approach would seem to go naturally with general taxation, with society investing in its future.

But, perversely, until now, through top-up fees, New Labour has looked to individual investment to support its social and democratic end. The bill for expansion is being footed by the student, whom they argue will be the chief beneficiary.

This leaves the Tories with a peculiar “through the looking glass” image of Labour’s position. They would solve the funding crisis at a stroke by stopping the expansion of universities, keeping them the preserve of the privileged few. But because they are so keen not to alienate the voters, they want society to invest, through taxation, for the benefit of the individual.

I am not sure that I can any longer justify making everyone pay for something that only some can enjoy. As long as competitive selection occurs, university will always be a privilege not an “entitlement” in any meaningful sense of the word. By the same token it can never really be a straightforward investment either, because money alone cannot and should not ensure a place.

A hypothecated graduate tax seems the only clear path ahead. It asks students to give something back to institutions from which they have benefited - but only when they are earning enough to make it manageable and even then, only in proportion to their salary. Let us hope that Blair sees this as a way forward not as a retreat.