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The decision caused outrage among Liberal Democrat supporters, many of whom are students. A call to increase the cost of being a student by hundreds of pounds through the introduction of council tax is likely to prove deeply unpopular.

It is understood that the Conservatives are strongly opposed to ending the student exemption on council tax.

The Liberal Democrats have been broadly criticised over the issue of tuition fees, after reneging on pre-election promises not to raise university charges.

While in opposition, leader Nick Clegg pledged to abandon the fees altogether and won the support of thousands of students across Britain.

Before the election, he signed a promise not to raise tuition fees, saying unequivocally: We want to abolish tuition fees. We think they're wrong.

But after joining the coalition government, he claimed the economic situation forced him to accept the rise.

His party signed up to government policy allowing institutions to charge up to 9,000 pounds a year, a change which saw student fees rocket.

Tens of thousands of students took to the streets to protest against the rise, wielding effigies and placards accusing the Lib Dem leader of conning them.

He later admitted he had not been able to deliver the policy that we held in opposition and blamed the financial situation for the change.

At the time, Labour deputy leader Harriet Harman ridiculed Mr Clegg, claiming he had hawked his way around university campuses seeking student votes ahead of the general election.

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Students should face paying council tax, Lib Dems say