Students should be forced to pay thousands more for their university education under proposals to lift the tuition fee cap, the long-awaited Browne review has said.
The independent report into student funding calls for universities to be left to decide what to charge - but those setting fees at more than £6,000 a year will be hit by charges.
The recommendation is likely to be seen as a highly controversial option for the Government and politically explosive for the Liberal Democrats, who campaigned against tuition fees during the General Election.
Their favoured option of a graduate tax, ruled out by ministers over the weekend, was dismissed by the Browne review as "unworkable".
The review calls for a radical shake-up of the funding system, with graduates paying a higher rate of interest on loans, more places being made available and universities effectively "competing" for students.
It said there should be "no single fixed price for higher education" because all universities are different and provide different courses.
"Institutions will have to persuade students that the charges they put on their courses represent value for money."
Those institutions wanting to charge more will have to prove improved standards of teaching and that they have fair admissions policies, as well as contributing more to supporting the poorest students.
Under the plan, similar to the current system, no student would pay back their loans until they were in work. But the repayment threshold would be raised from £15,000 to £21,000, with outstanding loans written off after 30 years.
Higher-earning graduates would pay back their loans at an interest rate equal to the Government's cost of borrowing, while those earning below the threshold would pay no real interest rate.
It emerged at the weekend that ministers appear to have agreed to introduce variable interest rates on student loans, with higher earners charged more on the money they borrowed while at university.
In addition, the review proposes to simplify the living costs system, so every student is entitled to a flat-rate maintenance loan of £3,750.
Lord Browne said: "Under these plans, universities can start to vary what they charge but it will be up to students whether they choose the university. The money will follow the student who will follow the quality. The student is no longer taken for granted, the student is in charge."
He added that, under the proposals, the bottom 20% of earners will pay less than under the current system and only the top 40% of earners would pay back close to the full amount.
The document says a graduate tax was considered by the review panel, but it concluded that a tax would hit students earlier, perhaps at the current income tax threshold which stands at £6,475.
Higher-earning graduates would also be forced to pay many times more than the actual cost of their course.
Vince Cable, the Lib Dem Business Secretary who previously promoted the idea of a graduate tax, wrote to MPs at the weekend saying that he now accepts Tory criticisms of the idea and it would not be pursued.
Mr Cable and Lib Dem leader Nick Clegg are already bracing themselves for a backlash over fees, with backbench Lib Dem MPs including Greg Mulholland and John Leech warning they will vote against any rise.
