Students' leaders said they were "extremely worried" yesterday after the Government predicted that top-up fees will lead to a two per cent fall in university applications.
If official figures confirm the decline later this month, it will be the first such drop for eight years.
The estimate came from Higher Education Minister Bill Rammell ahead of next week's deadline for applications.
Mr Rammell insisted a two per cent fall would still represent a "strong performance", given the surge in applications last year as students got in before top-up fees.
He argued many students would be better off under the new system, with more generous grants and bursaries.
But the National Union of Students (NUS) said Ministers must now admit that top-up fees were a deterrent.
Julian Nicholds, NUS vice president, said: "The prospect of top-up fees for courses starting next autumn will further harm the Govern-ment's stated aim of widening participating to meet their target of 50 per cent."