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Lord Jenkins of Hillhead, the chancellor of Oxford University, has warned that differentiated undergraduate tuition fees are inevitable in the absence of increased government funding for universities.

He told the House of Lords on Wednesday that research-led universities such as Oxford, Cambridge, Imperial, and University College London would be forced to find the money to raise academic salaries or face a brain drain to institutions abroad and to industry. Top United States institutions were hugely wealthy partly because they charged thousands of dollars a year for tuition.