Although ethnic minorities are overrepresented in higher education they are still thin on the ground in old universities, says Trevor Phillips, and top-up fees will only widen this inequality.

Having made a mildly controversial intervention in the university admissions debate last year, when I was involved in the transfer of an excluded state-school pupil to a private school, and suffered the indignity of being described as a plonker (more or less) in the national press by my own daughter (herself headed for university next year), I know from experience that the intersection of race and education is highly emotional ground. But for people from ethnic minorities, reaching the top flight in the education system could not be more important. That is why I am so passionate about the issue.

The truth is that for most minority children who can't make the grade as entertainers or athletes (and that means pretty much all of us) education is the only route to social mobility. That is why young people from ethnic minorities are hugely overrepresented in higher education. Ethnic minorities account for about 12.1 per cent of British 16 to 24-year-olds but this figure rises to 15.6 per cent in higher education. And we're not just talking about the offspring of Asian and Chinese families, who are outperforming the average white student at GCSE by about 25 per cent and 50 per cent respectively, according to government figures. Africans and Caribbeans, too, are more likely to be in higher education than their white peers.

However, the figures mask some unpleasant realities. There is a marked asymmetry in what and where ethnic minorities study. You will see lots of Asian faces in the medical, dental, law and computer science departments; but there won't be many in education, physical science or humanities. The proportion of black Caribbean students in medicine is just 0.3 per cent.

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More critically, do not go looking for ethnic minority students in large numbers in the old universities. The official proportion is about 14 per cent, but because numbers of home and overseas students are not disaggregated, we do not know for certain how many ethnic minority students from British schools find their way into old universities. Given that financially valuable overseas student applicants account for about one-fifth of all those trying to enter British higher education, it is unlikely that more than a few per cent of minority British students fight their way into our top universities.

In the "new" -for which read big city, poor and stressed -universities, the picture is reversed. Their population is more than 21 per cent ethnic minority; even allowing for the presence of overseas students, this is where the bulk of minority students are to be found. Black Caribbean and black African students are respectively four and three times as likely to be in "new" rather than "old" universities.

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There are good and bad reasons for this pattern. One is that students themselves make a choice. A friend of mine told me recently that her nephew had visited a northern university, liked it, but plumped for a London college for the simple reason that he felt that the moment he stepped off the campus he would be a marked man in an overwhelmingly white community.

A bad reason, of course, is the performance of secondary schools. Though some groups of children are doing spectacularly well at GCSE and A level - children of Indian and Chinese extraction especially -others are failing.

Children with Pakistani and Bangladeshi heritage are way off the pace; African-Caribbean children fall further behind the average every year they remain at school, even though they enter school not that far adrift. It is arguable that if we wanted African and Caribbean children to raise their attainment levels closer to the average, the best thing we could do is to keep them out of school from about the age of eight, when their performance starts to drop.

And then there is the university selection process. The surveys done by GP Aneez Ismail in Manchester show beyond doubt that even successful Asian candidates suffer bias against them when applying to medical schools. But the problem is wider than that. Minority students have to perform better than whites to secure a place at an old university. They are more likely to receive an initial offer from a new university, while for white applicants there is little significant difference wherever they apply.

Does any of this matter, other than among snobs who hanker after the cachet of Oxbridge, Imperial, York and the like?

Yes, it does. As a matter of principle, there should be no differences by racial origin. In a system where resources are distributed unevenly, an outcome that concentrates minority students disproportionately at the poor end of the spectrum can only be described as a classic case of institutional racism. All universities may believe that their systems are fair and based on individual merit; but, frankly, intentions matter very little here -what counts is the outcome. And it's time to change the outcome.

The Race Relations Amendment Act of 2000 has given the Commission for Racial Equality new powers to insist on that change. Every listed public body -and there are 43,000 of them -has to produce a race-equality policy, collect data on who it employs, and where and how it serves different kinds of people. Where there is evident bias in the outcome, it has to have a plan to remedy the problem, consult on its policies and report annually on how it is doing. And if it does not meet its duty, we can, with the help of the courts, compel it to do so.

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We want to work in partnership with universities, and many are trying hard, supported by the Equality Challenge Unit at Universities UK. Special relationships with inner-city schools, targeted marketing, foundation courses and new pathways for mature students will all help. But these tend to be more prevalent in new universities than the old.

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But what will be most important in the next few years is exactly how the government solves higher education's funding problems. With at least four former presidents of the National Union of Students, including myself, likely to play a role in the debate, it is tempting to imagine that the union will have a head start. But the government seems determined to carry through a new policy on tuition fees as a way of filling the yawning gap in university finances.

It is hard to contest the need for an injection of funds. But the way in which the money is raised should not exacerbate the divisions I have already outlined. The Americans, who have adopted a version of the variable-fee proposal, have clearly demonstrated what happens in practice.

If we think of the universities of Harvard, Yale, Stanford and the like as the penthouses of the US higher-education establishment, the combination of biased admissions and high fees would, if uncorrected, lock the elevator doors of Ivy League institutions to black students. But since the 1970s, US universities have installed special lifts that now sweep qualified minority students past the lower floors up to the heights previously marked "whites only".

The US solution has been threefold. First, the expansion of non-academic paths to admission -the academically gifted Paul Robeson managed to get into Rutgers University solely on a football scholarship. Second, the introduction of affirmative-action programmes, which in essence award extra points for a candidate's race, transformed US campuses -both US secretary of state Colin Powell and US national security adviser Condoleezza Rice freely admit that their careers would have been stillborn without this corrective action. And, third, the giving of generous levels of student support, with bursaries explicitly targeted at minority students.

Crucially, this has been shown to cancel out the disincentive of loans for black students who know that their lifetime earnings will always be lower than those of a similarly qualified white person -a finding that was recently confirmed by a Cabinet Office report. The report shows that even when wage rates for different ethnic groups were compared on a like-for-like basis -that is to say, removing the effects of geography, educational qualifications and class -there was still an "ethnic penalty".

On average, annual male earnings were ?5,000 lower for blacks, and more than ?6,000 lower for Pakistani and Bangladeshi-heritage Britons, than for similarly qualified whites. Over a 40-year working lifetime, that pretty much cancels out at least half the supposed wage advantage of being a graduate; and in fact we know that most minority graduates never get into the top brackets, as the hundreds of discrimination claims that come before me at the Commission for Racial Equality for legal assistance every month confirm.

The problem is that minority students may now be asked to pay a penthouse rent without getting the key to the express lifts. UK law does not allow affirmative action. There is as yet no sign of the targeted bursaries that would cancel out the discouraging effect of top-up fees. And we have no true non-academic pathways into top universities. Ministers have said nothing to suggest that minority access will be an important element of the Office of Fair Access regulatory regime.

At present, it's all to play for. That is why we at the CRE are awaiting the next instalment of the government's plans for higher education with bated breath. It is a tricky political problem for education secretary Charles Clarke and his team. But for ethnic minorities, it is fundamental to answering the question of whether we will ever be part of mainstream society, or whether we are doomed to stand on the outside looking in for generations to come. As Bill Shankly once said of football, it's not a life-and-death matter -it's more important than that.

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Trevor Phillips is chair of the Commission for Racial Equality.