The University of Huddersfield has defended suggestions that it may introduce a Pounds 1,000 student top-up fee by claiming other institutions are considering the same thing.
In a financial forecast sent to the Higher Education Funding Council for England in July, the university said fees and more than 100 staff redundancies may be necessary to tackle a Pounds 4 million projected budget deficit.
A leaked letter to HEFCE from John Tarrant, vice chancellor and principal, said: "The remedial action necessary to balance the budget over the period of this forecast will seriously damage the university and the quality of education it provides."
While the London School of Economics has already talked about introducing top-up fees, this is the first such move by a new university to become public.
Staff and students fear people would be unwilling to pay Pounds 1,000 to study at Huddersfield and that this could jeopardise its viability.
Harry Lahmers, chairman of the joint union council at Huddersfield, said staff would strongly oppose any move to introduce fees or large-scale redundancies. But he added that Huddersfield was not alone in considering them.
"My information is that there are other universities in far more financial difficulties than we are," he said. "If this sort of thing is going to take place in the higher education sector, we don't think that we will be the first to have to enforce it."
Professor Tarrant said a first-year registration fee for students not in receipt of a full maintenance grant was one option. Leslie Wagner, vice-chancellor of Leeds Metropolitan University, was one of the first to warn that further Budget cuts could lead to top-up fees.
The Huddersfield Financial Forecasts 1996 document shows an accumulated budget deficit of Pounds 4.1 million by 1999-2000. Finance director Paul Smelt writes that some 112 redundancies would be needed to achieve the necessary Pounds 3 million in staff savings.
He says the result would be an "unacceptable" increase in the student:staff ratio from 19:8 in 1996-97 to 22:5 by 1999-2000. The document says any registration fee would have to be set at Pounds 1,000 to reduce the deficit significantly, giving a saving of up to Pounds 1.7 million by 1999-2000.
A HEFCE spokesman said he was not aware of similar suggestions by any other new universities. But he said last year's Budget had had a significant impact on the sector and that this would be apparent in figures published next month showing the overall financial health of the university sector.