Tuition fees cap will rise to £3,375

Fees in 2011-12 will be uprated in line with inflation from the current limit of 3,290.

In a written statement to MPs, Mr Willetts said the amount of tuition fee loan available would be increased to match the amount.

Maintenance loans will remain the same for 2011-12 – currently a maximum of 4,950 for full-time students living away from home, or more in London.

Mr Willetts's statement comes days after Business Secretary Vince Cable told MPs he was considering a new tuition fee level of 7,000 per year.

He was responding to Lord Browne's review of student funding, which proposes the most radical shake-up of higher education funding for years.