It costs up to £21,000 a year to teach a single Oxford University student, a paper from a leading Oxbridge-based think-tank was expected to reveal this week.

In a paper expected to dismiss government plans to introduce £3,000 annual top-up fees as woefully inadequate, the Oxford Centre for ÌÇÐÄVlog Policy Studies has calculated that it costs an average of £18,600 to teach Oxford students - ranging from £17,100 a year for arts students to £20,900 for science students.

The paper, from an influential group of senior Oxford figures led by New College bursar David Palfreyman, will fuel arguments that the leading universities must reject state funding and charge full-cost tuition fees to maintain their world-class status.

Professor Palfreyman would not comment on his paper because it was not due to be published until after The Times Higher went to press, but he said that it would calculate how much Oxford would have to charge in order to survive without the £52 million state funding it currently receives.

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Cambridge University's governing council issued a statement this week stressing that the £3,000 fee will be nowhere near enough to maintain the university's elite status. It said Cambridge would need to develop other independent revenue streams.

• Education secretary Charles Clarke has urged universities not to increase their recruitment of overseas students at the expense of offering places to British undergraduates, writes Paul Hill.

Responding to claims by several top universities that they may have to resort to raising income from overseas students, Mr Clarke stressed that the main mission of UK universities should be to provide for British undergraduates.

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He said: "I understand why they do it [recruit overseas students paying higher fees] and I don't criticise them for it - but I don't like it. We have to have freestanding, strong universities that have their money motivations, but that are providing for the people of this country."