Oxford University students must pay up to £10,500 a year if they are to catch up with US rivals, a leading academic has claimed.

The "aspiration gap" between Oxford and Ivy League universities such as Harvard and Princeton will continue to widen even after fees rise to £3,000 a year, said an independent think tank headed by New College bursar David Palfreyman.

Mr Palfreyman, director of the Oxford Centre for Higher Education Policy Studies (OxCHEPS), said Oxford might be forced to deny places to 1,400 UK undergraduates a year and give them to more lucrative non-EU students instead.

He also feared a "brain drain" of dons to wealthier universities across the Atlantic.

It costs £18,600 a year to educate an Oxford student and the university faces a £14m deficit by 2012 even after it gains the power to charge students the full £3,000 annual top-up fee, he warned.

The "aspiration gap" between Oxford and the Ivy League is defined as the difference between academics' salaries, and the value of student scholarships, research facilities and buildings.

Mr Palfreyman is the second leading Oxford figure to warn that £3,000 fees were not high enough.

Last October, Lord Butler of Brockwell, master of University College and the chairman of the Government's inquiry into the reliability of intelligence on Iraq before the war, called for elite British universities to form their own Ivy League.