Vince Cable is under fire over plans to charge students thousands of pounds more for university, as he scrapped a Liberal Democrat election pledge to oppose any rise in tuition fees.
The Business Secretary told the Commons ministers were considering a new tuition fee level of £7,000 per year - more than double the current £3,290.
He was responding to Lord Browne's review of student funding which proposes the most radical shake-up of higher education funding for years.
The review called for the cap to be lifted, raising the prospect that institutions could charge as much as £12,000 a year for some courses.
Mr Cable told MPs that the Government is "considering this carefully".
The future of tuition fees is a politically explosive issue for the Lib Dems, who campaigned against them in the general election.
Many Lib Dem MPs signed a National Union of Students (NUS) pledge to vote against any hike.
But when confronted on Tuesday, Mr Cable admitted the pledge would have to be abandoned.
He said: "Let me just finally confront this issue of the pledge, the promise, which I and my colleagues undertook to implement.
"Under current economic circumstances we cannot implement that."
