In a circular letter sent to institutions this week, the Higher Education Funding Council for England says the approach was decided because "due to transient effects from the introduction of the new fee regime, 2012-13 might be an atypical year for recruitment".

The announcement on 18 December marks a reverse from previous Hefce guidance. In March, Hefce told institutions that where they "recruit significantly below their student number control limit in 2012-13, this may lead to a reduction to their baseline control limit for future years".

The announcement is a signal that student recruitment under the first year of ?9,000 fees has proved more problematic than Hefce expected.

The fact that many Russell Group universities lost out on students this year and feared cuts to allocations next year will have increased the pressure on Hefce to revise its approach. The University of Southampton, for example, saw its undergraduate intake this autumn fall by 600 on the 2011-12 academic year.

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Hefce says that its board "decided at its December meeting that, in general, we will not reduce 2013-14 limits on the basis of shortfalls in 2012-13". The funding council also stresses that "this approach applies for this year only".

And Hefce adds that "we may have discussions with a very small number of institutions, whose shortfalls appear particularly extreme, about setting an appropriate limit for 2013-14".

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David Willetts, the universities and science minister, has emphasised that he wants to end the centralised allocation of undergraduate places, with student demand playing a much greater role in the distribution of numbers among institutions.

Hefce will see its announcement as a move to ensure stability in a period of turbulence, but others may see it as rowing back from the competitive system envisaged by the government.

john.morgan@tsleducation.com