Thousands of school-leavers may end up on the dole instead of going to university, ministers have been warned.

Admissions service Ucas has predicted that by the end of the summer 600,000 people will apply for a university place in England - up by 40,000 places or 9 per cent on last year.

The government initially said it wanted to fund an extra 15,000 places for this year's entry, then capped the number at 10,000.

But Phil Willis, chairman of the Commons Education Select Committee, said he has been told only 3,000 extra first-year places have been funded.

According to Ucas, the number of places available through the clearing scheme could be as low as 16,000. Last year, some 44,000 teenagers applied for places through clearing.

Mr Willis has written to Business Secretary Lord Mandelson to ask for extra funding to take the pressure off the system.

The Department for Business, Innovation and Skills has insisted there will be more students going to university than ever before this year.

The government has said it wants 40 per cent of all adults in England to have a university education by 2020.

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