Predictions published yesterday suggest a combination of demographic change, rising numbers gaining A-levels and a surge in students from the 10 new EU countries will mean up to 240,000 extra applicants for undergraduate degrees.
The increase in the proportion of 18-year-olds taking two or more A-levels - and therefore likely to go on to univer sity - means the government is set to hit its target of 50% of young people going into higher education, according to the Higher Education Policy Institute (HEPI), which produced the forecast.
But with no guarantees that the government will fully fund the increased places, universities may have to cut costs, the HEPI warned.
If some opt not to make extra places available, students achieving high grades will face greater competition to secure places in the institutions they want.
The HEPI study, Higher Education Supply and Demand to 2010, suggests demand for undergraduate places could rise by between 30,000 and 100,000 by 2010 as a result of an increasing proportion of students taking A-levels.
An increase in the number of 18-year-olds will create a likely surge in demand for around 120,000 more places.
The HEPI director, Bahram Bekhradnia, said: "My guess is that there will be places available for everybody somewhere because it would run counter to the government's stated principle [of expansion] otherwise. But it is another question whether students will get the places they want."
Universities UK, which represents vice-chancellors, said the trends had already been identified, but called for expansion to be properly funded.
Mandy Telford, president of the National Union of Students, said the NUS supported the government's drive to get more people into higher education. But she warned: "The increased demand for university places must not just be filled by more of the same.
"There are still students from non-traditional backgrounds who do not see university for them."
A DfES spokesperson said: "This paper shows that we have a choice. We either meet clear student demand and expand or we place a cap on people's ambitions. This government is determined to increase higher education opportunities."
