"Oxford University will today offer bursaries to all undergraduates whose parents earn less than PDS20,000 a year in an attempt to repair the damage done by the Laura Spence affair.

Students who are exempt from tuition fees because they come from poor homes will be offered PDS1,000 in their first year and PDS500 in subsequent years. The scheme, costing more than PDS1 million, will have the effect of replacing part of the maintenance grants abolished by Labour.

An anonymous donor known only to the vice-chancellor and a group of senior donors is providing half the money. The remainder will come from the university's colleges on a sliding scale reflecting the number of beneficiaries.

The scheme will run for at least five years. Oxford has the smallest proportion of state-school students of any university. Attempts to raise the share of places for such students suffered a serious setback when Magdalen College's rejection of Miss Spence was seized on by Gordon Brown and other critics of the university."