Universities Minister David Willetts has said that the cost to the taxpayer of degree courses had to be tackled, in what is seen as a sign that students may have to pay higher fees.

Speaking to The Guardian, he said that the current system is "unsustainable" and in need of "radical change".

And he warned that the cost of hundreds of thousands of students' degree courses was a "burden on the taxpayer that had to be tackled".

"My view is that it is not a matter of simply changing the fees," Mr Willetts said. "The system doesn't contain strong incentives for universities to focus on teaching and the student experience, as opposed to research."

The Tories' Liberal Democrat coalition partners fought the election promising to scrap tuition fees and are not expected to back any move to raise them.

Mr Willetts stressed later that he is not assuming student fees would rise and said that is a matter for the Browne Review.

He told BBC Radio 4's Today programme: "We should think much more imaginatively. What I want is something that does reduce the burden on the taxpayer, and above all improve the quality of the students' experience and improve the teaching."

He added: "I'm not assuming fees should rise. That's a matter for John Browne."

Mr Willetts said students might, for example, study at a local further education college for an external degree from a university.

A review commissioned by the Labour government is still pending into whether student tuition fees should rise from the current £3,225 a year. Mr Willetts said he did not want to pre-judge Lord Browne's review, but added that students should consider university fees "more as an obligation to pay higher income tax" than a debt.