The government should not end elitism but widen access to the best services, the education secretary has insisted.

Charles Clarke has also raised the prospect of charging businesses higher national insurance for employing graduates as a means of bridging the funding gap in higher education.

Forum Response: Universities UK

Diana Warwick, chief executive of Universities UK, told ePolitix.com: "The government's commitment to ensuring equal access to higher education is mirrored by universities' own commitment. We also welcome their recognition that universities are seriously underfunded.

"However, if the government is serious about achieving its 50 per cent participation target, maintaining UK HE's excellent international reputation and staying in step with Europe, the UK needs a range of well-funded universities.

"Different universities offer different opportunities, some are very involved in their communities, some are at the vanguard of efforts to widen participation to those from lower socio-economic groups, while some concentrate on research; new universities produce world class research, history at Oxford Brookes for example, as do old universities.

"The current focus on the UK's 'top' universities is potentially dangerous. Extra resources are needed to maintain high quality across all universities, and to achieve the government's own aims for the sector."

Forum Response: Institute of Directors

Ruth Lea, the director of the Institute of Directors, told ePolitix.com: "The government is treating business as some sort of cash cow. Employers are already paying through the market for students' education.

"It must learn that every time it has a new idea it cannot come knocking on businesses' door for funding."

A spokesman for the DfES, told ePolitix.com: "We must reform the higher education sector to keep it amongst the best in the world.

"We are engaging in a debate and looking at a number of options but no decisions have been made. The strategy paper will be published in January."