A 50 per cent increase in the student registration fee to €1,000 a year was sought by the Department of Finance as part of discussions on the Government's Estimates for next year.
The move was rebuffed by the Department of Education, pending the review of all third-level charges due early next year. But education sources say Finance is pushing strongly for vastly increased charges at third-level for the next academic year.
Last July, there was considerable controversy when the registration charge was increased by 69 per cent to €670.
The Finance plan was to increase this to €1,000 from September of next year, a move which would have yielded Exchequer savings of more than €16 million.
Last night, the USI president, Mr Colm Jordan, said he was "outraged and repulsed at this news". He warned: "If the registration charge was to increase again, it could have legal implications for the Government. This is a student services charge, so the Government has no right to use it to secure savings to the Exchequer.
"Another large increase from the Government could lead to an unprecedented revolt from students and their families."
The Department of Finance opposed the abolition of third-level fees in 1995 and it has long supported increased student charges.
State support for students - including tuition fees - cost the Exchequer about €350 million last year.
The allocation in the Estimates remains unchanged for the coming year, pending the outcome of the Department of Education's review of student supports.
The Minister for Education, Mr Dempsey, has said that fees could return for "those who can afford it". Education officials are examining how the €350 million spent on student support could help to achieve wider access to third-level.
Should fees return, Mr Dempsey hopes to divert any savings to support maintenance and other grants for less well-off students. But the Department of Finance will want any saving made to go back to the Exchequer.
Last July, only about 6 per cent of the 69 per cent increase in registration charges went to the colleges; the remainder went directly to the Exchequer.
Education sources now acknowledge that vastly increased registration charges and/or the return of third-level fees is now inevitable given the crisis in education funding.
Last week, the Conference of Heads of Irish Universities warned that staff cuts were inevitable unless cutbacks agreed in the Estimates were reversed.
It said the cuts in recurrent funding amount to a shortfall of about €770 a student.
The Department of Education review into student support - which will determine whether fees return - is expected to be published early in the new year.