Prime Minister Tony Blair is to unveil a £200 million scheme on Thursday to encourage more wealthy graduates and philanthropists to donate money to universities.
The money will be allocated in matched funding, where for every £2 of private money that universities raise, the Government will give an extra £1.
Ministers hope the US-style initiative will generate £600 million for English universities and promote a lasting culture of individual giving to higher education.
But academics said the Government should put more public money into universities and stop trying to find other people to foot the bill.
The Government has relaxed the rules on tuition fees, allowing universities to charge up to £3,000 per year for undergraduate courses.
Both Oxford and Cambridge have been forced to consider radical measures in an effort to keep pace with wealthier Ivy League universities in the US.
Mr Blair said the Government understands that universities need to have the money to compete and to attract more students.
"It is important that our universities have every opportunity to raise the resources they need," he said. "That's why this fundraising plan is so important. It will incentivise all universities to raise more charitable and private funding.
"Increasing voluntary giving is a vital step in enabling institutions to build up substantial endowments over the longer term, so that they can improve infrastructure, teaching and student bursaries."
Officials said £200 million of Government money has been allocated for the scheme, which will run for three years from 2008.
