Stephen Dorrell, shadow education secretary, said he found himself in total agreement with left-winger Diane Abbott, the Hackney MP, when she said the Government’s plans would unfairly load the most disadvantaged with debt.

Mr Dorrell said that the Government’s decision to end maintenance grants would result in students from low-income backgrounds contributing, exclusively, to the cost of expanding higher education.

Mr Dorrell said that Lord Dearing, author of last year’s major report into the future of higher education funding had rejected the proposals to abolish the maintenance grant, preferring a flat fee for all to be paid back from later enhanced earnings. Mr Dorrell called it a “bungled” and rushed Bill.

The Education Secretary David Blunkett said students would only repay the loans when they were earning, and the increase in hardship grants would help the poorest.

He alluded to the Bill’s rocky ride in the House of Lords, where it suffered three defeats. Comparing himself to the aircraft mechanic in Hancock’s Half Hour left clinging on as the plane took off, he said: “Part of the wing has fallen off, and the fuselage is in considerably bad order.

“Nevertheless, the Bill is still flying and it will be our job in committee to ensure repairs are done while the Bill is still in the air.”

Offering one concession, he said the education and employment select committee would enforce a lock on university tuition fees to ensure students paid no more than a quarter of the average costs. The legislation says the fee cannot be raised above inflation without affirmative votes from both Houses.

Several backbenchers echoed Ms Abbott’s fears. David Winnick (Walsall, North) and Dr Lynne Jones (Birmingham Selly Oak) said those from the poorest socio-economic groups would be further deterred from higher education.

Margaret Hodge, chair of the education and employment select committee, was heckled by her own side when she rose to defend the Government. But she took the opportunity to contrast shares of the education financial “cake”: pound;6,000 per student a year in higher education, pound;2,000 in further education and pound;2,000 per child in schools.

The Government also made further concessions on the General Teaching Council which is to be given new powers to suspend or bar teachers from their jobs for acting unprofessionally.

The council as set out in the Bill had been dismissed as an expensive talking shop by peers. But following a House of Lords’ defeat which gives the council similar powers to the General Medical Council, the Government has compromised.

Mr Blunkett is preparing an amendment similar to one defeated in the Lords. This said the council can suspend or remove teachers who have “fallen short of the professional standards appropriate to a place on the register”.

A Government source said: “Mr Blunkett, from his experience as shadow health minister, is concernedIabout giving away powers the Secretary of State holds, particularly in terms of child protection, and is now looking at this amendment as a way forward.”

There appear to be no plans to correct the anomaly which means students outside Scotland in the UK will have to pay the extra year’s tuition fee for the Scottish four-year degree - unlike the Scots or students from elsewhere in the European Community. The Scottish Office is seeking talks with Scottish universities to persuade them to accept English students on the second year of their degree courses.