Student tuition fees would be capped at £6,000 under Labour plans unveiled by Ed Miliband in a crowd-pleasing eve of party conference announcement
The Opposition leader said the £1 billion move to cut the maximum charge by £3,000 would be funded through a levy on high-earning graduates and a tax hit on bankers.
As well as pleasing activists, the move will heap pressure on the governing parties, especially the Liberal Democrats whose U-turn on opposing fees sparked student riots.
However the move has not been welcomed with open arms by students. Liam Burns, who is the president of the National Union of Students, said that it was unlikely his members would see Labour as a true alternative:
Burns told Sky News: "When we managed to elect a parliament where the majority of MPs said we promise not to increase tuition fees at all, this is hardly the stuff that students are going to get excited about."
Mr Miliband said he wanted to use the annual gathering, being held in Liverpool, to show hard-working families "that Labour is back as the party of them".
As well as the fees reduction, he will use his set-piece speech on Tuesday to offer radical measures to end "rip off" household energy bills and over-expensive train fares.
In interviews with two Sunday newspapers, Mr Miliband said graduates earning more than £65,000 a year would pay higher interest on their student loans to help fund the lower cap. The rest would be found by cancelling, for the financial sector, the Government's cut in corporation tax.
"Parents up and down the country are incredibly worried about their sons and daughters," Mr Miliband told The Sunday Mirror. "We want to take action to make it easier for people to go to university and not feel burdened down by debt."
Ditching the Government's proposed cut in corporation tax from 28% to 23% was "fair" because "we shouldn't be cutting taxes for the banks at the moment", he said.
Coalition sources said the corporation tax cut for banks was already offset by the bank levy and suggested better-off graduates would find ways to get around the higher rates.
Universities Minister David Willetts said it represented a cynical U-turn, saying: "Ed Miliband promised a graduate tax and now he's accepting fees have to increase to finance universities in tough times. So why should students trust anything he says? He says one thing to become leader and within a year does a U-turn."