An economist and university vice-chancellor has called on the Government to scrap fines for universities who over-recruit, as figures show a huge increase in applications.

Professor David Green, vice chancellor at the University of Worcester, where applications are up 35 per cent compared with this time last year, said Worcester and many other universities would be happy to take on additional students for no extra government funding if it meant giving more people the chance to enter higher education.

He said: “Universities and higher education colleges need to be allowed to recruit more full-time undergraduate students, without penalty,” he said.

“Many will do so, even if we receive no additional government funding for these additional students, as we appreciate the real needs of the potential students concerned, we are fully committed to the policy of widening participation in higher education and we are prepared to make sacrifices at a time of real economic difficulty.”

Applications to study at the University of Worcester have risen for nine consecutive years and have tripled in the past seven years, making it Britain’s fastest growing institution, according to the vice chancellor.

Figures published by the Universities and Colleges Applications Service show that nationally applications are up by more than 22 per cent this year. However, the number of places available to students has fallen, which could potentially leave up to 300,000 applicants out in the cold.

Professor Green said: “Last year, in response to the unprecedented growth in university applications, the Government allowed universities, at the very last minute, to take in another 10,000 applicants. This year those 10,000 un-funded places have been withdrawn, despite the fact that the gap between places and applications is set to double to well over a quarter of a million.

“Furthermore, universities will be fined £3,700 for each extra student they take on. This will make it certain that growth nationally comes to a shuddering halt.”

“The latest twist is that the National Health Service has begun to cut training places for nurses and midwives, which will further increase competition for scarce places.”

In 2008 130,000 applicants missed out on a place at university. This year, with applications soaring as the Government imposes a freeze on most university intakes, it is likely that at least 250,000 and possibly as many as 300,000 will be disappointed, Professor Green said.