Government to test coalition unity with student fee rise

University officials stand outside Senate House during a graduation ceremony at Cambridge University in eastern England October 23, 2010.

LONDON (Reuters) - The coalition government will announce plans Wednesday to almost triple university student tuition fees in England in a move set to test the loyalty of its junior Liberal Democrat partner.

Universities Minister David Willetts will tell parliament the government wants to let universities charge students as much as 9,000 pounds a year, well above the current 3,290 pound maximum, a senior government source told Reuters.

The move will take Britain closer to a U.S.-style university fees model, with the extra revenue from students replacing a planned 40 percent cut in state funding for higher education to help to shrink a record budget deficit.

The decision to go ahead with the plans is politically difficult for the Liberal Democrats, who promised to abolish the fees in the May election that brought the coalition to power.

Divisions over the issue are not expected to bring down the coalition with the larger Conservative party, but will add to uncertainty over whether it can hold together for a full five-year term.

The plans will affect many families already hurt by decisions to raise the retirement age and slash welfare payments as the government seeks to reduce a deficit equivalent to 11 percent of gross domestic product.

Lib Dem support has slid since the election as the spending cuts hit home.

Students and college lecturers plan to demonstrate in central London next week against the fee proposals.

Adding to pressure on the Liberal Democrat legislators is a pledge each signed during the campaign that if elected they would not vote for a rise in student charges.

Some have already said they will stick to their promises and vote against the increase when it comes to parliament.

Last month Liberal Democrat leader Nick Clegg, the coalition's deputy prime minister, wrote to all his legislators in a bid to prevent the threatened rebellion.

Ministers will present the plans as a progressive reform of student financing aimed at improving social mobility in an attempt to win over anxious legislators.

Universities charging more than 6,000 pounds a year for tuition will be penalised unless they can demonstrate they are helping students from poor families to win places, addressing a Liberal Democrat concern.

The 9,000 pound maximum fee is itself a compromise following proposals in a government-ordered review by former BP Chief Executive John Browne, which called for universities to be able to charge what they liked.