Baroness Blackstone told a conference in London this week that Labour party plans to boost funding by recovering student maintenance costs would not sustain a high-quality system. But Labour is playing down internal divisions over funding.

Baroness Blackstone, foreign affairs spokesman in the Lords, speaking at a conference on "The future of higher education" in her capacity as Master of Birkbeck College, London, said they would also need to recover some tuition costs. She cited the National Commission on Education's recommendation of 20 per cent as a minimum.

David Blunkett, shadow education and employment secretary had earlier told journalists that he rejected recovering tuition costs. At the conference he reiterated Labour support for renewed expansion, saying: "We are looking forward to a wholly new economic and social future, and to the people who will create the jobs in that future." But he warned that present funding arrangements would be inadequate.

Baroness Blackstone also argued against a rapid renewal of expansion. She said: "Demand is currently being met. School leavers with two A levels will get places somewhere in the system." She added that there should be a reduction in science and engineering places which were expensive, hard to fill and intended to serve an industrial capacity which no longer existed: "We are now producing more engineers and scientists than Germany" She told The THES: "The Lifelong Learning document issued last month is intended as a consultation document. David Blunkett and Bryan Davies want to hear views from inside and outside the party. We should be able to have a proper discussion about these issues."

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Bryan Davies, party spokesman on further and higher education, said: "One thing that has emerged from this conference is a difference between the long-term perspectives our funding proposals are intended to address and the acute short-term distress currently being inflicted on the system. Her views reflect those short-term worries."

Labour received a similar warning on inadequate funding from Gareth Roberts, vice chancellor of Sheffield University and chair of the Committee of Vice Chancellors and Principals. But Professor Roberts was more in line with Labour linking on the need for cooperation between institutions.

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Mr Blunkett could be seen nodding vigorously when Professor Roberts said that "institutions should be rewarded for developing stronger links in their regions and with colleges of further education".

James Wright, vice chancellor of Newcastle University, warned the conference that anyone pinning their hopes on information technology would be seriously disappointed: "It will not provide cheap and simple solutions. The skills being demanded by employers are people skills which require human interaction. Even where IT is appopriate it is not cheap."

Sir Mark Richmond, described as a post-doc at University College, London, argued for top-quality scientific research to be concentrated in an "Ivy League" of research universities: "This is a rather elitist approach, but without it we will fail," he said. But Mr Blunkett warned: "We need to be careful we don't end up with an Ivy League of excellence and also-rans."