Australia's federal cabinet is to allow universities to impose their own fees on top of those set by the government.

The proposals, leaked from a report by education minister Brendan Nelson, signify the most sweeping changes to university operations in more than a decade.

The report, which will be released when preparations for the May budget have been completed, includes merit-based scholarships for low-income students and an interest-free loan scheme for those who pay the full cost of their courses.

Universities would be able to add top-up fees above those imposed under the Higher Education Contribution Scheme. At present, students can defer their Hecs charges - ranging from 35 to 50 per cent of course costs - until they graduate and are earning at least A$24,000 (?9,200) a year.

51¹ú²úÊÓƵ

The courses likely to attract top-up fees are those in high-demand fields such as law and medicine, where Hecs charges are already at the A$6,136 a year maximum.

Additional fees would mean that students would pay more than the top contribution of ?3,000 proposed in the English higher education white paper.

51¹ú²úÊÓƵ

The Australian National Union of Students said its members would oppose the plans.

Australian vice-chancellors welcomed the freedom to impose their own fees.