The Group of Eight made the request in of its demand-driven undergraduate funding system, which is due to report next month.

The Go8 hails the uncapping of funded places as “an important step on the way to a more responsive, more market-driven and less regulated higher education system”. But it adds that deregulation has not gone far enough and proposes that universities be allowed to charge whatever tuition fees they like in exchange for no longer claiming public subsidy for those courses. Such a mechanism was proposed in the 2008 Bradley Review, which also made the original proposal to uncap student places.

The Go8’s proposed scheme would initially be limited to law, accountancy, administration, economics and commerce, but could later be extended to “other fields of high private return”.

Australian undergraduate fees are currently set by the government at variable rates according to complex criteria involving the earnings premium associated with each course and its national importance.

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Adopting the Go8’s proposals could drive up domestic fees at top-ranked institutions by 30 to 40 per cent, to A$15,250 (£8,200) a year.

However, as the fees would be met by Australia’s income-contingent loan scheme, the scheme would still be “equitable”, the Go8 says.

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Acknowledging widespread concerns that quality has suffered in the demand-driven system, the Go8 called for more transparency about admissions criteria. “Rapid increases in enrolments…have given rise to growth in the entry of students whose levels of school attainment were previously regarded as indicative of inability to benefit immediately from a bachelor degree program,” it notes.

The Go8 also wants to see more funding redirected to cheaper sub-degree programmes at “non-university suppliers” and more research cash allocated by competition.

paul.jump@tsleducation.com