The Government has postponed its plans to privatize the UK university system, giving rise to speculations of yet another U-turn on education policies.

The bill, which removed the need for government funding, is unlikely to be published before 2015.

The legislation was designed to allow private firms to set up universities in Britain, which would drive down the cost of tuition fees, allowing universities to compete for students as they strive to offer value for money.

Buckingham and BPP are currently the only two private universities in the UK with the power to award degrees but the plans would enable the foundation of a plethora of similar institutions.

However, there are fears that this system would undermine the international reputation of UK universities by devaluing the qualifications which they bestow.

Liam Burns, President of the National Union of Students has expressed concerns that the government is continuing to sell off our education, saying that the suspension of this bill merely enables them undermine the education system “in private and under the radar”.

By privatizing universities, it was hoped the UK will produce more graduates in key sectors such as law and business. But students attending these corporately funded institutions would be left to the mercy of financial markets, having their education steered by the fortunes of global commerce.

In an attempt to justify the privatization of the education system, David Willets, the Universities Minister said, "We will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates."

He had pledged to introduce legislation this year, meaning its postponement comes as a major blow to him.

Yet with private universities exempt from government targets for the admission of students from poorer backgrounds, it is feared that passing this bill would only further reduce numbers of university applications.

"There's going to be a further discussion in cabinet in the next couple of weeks. There's no final decision either way yet", said Willets.