The London School of Economics has become the first elite university to declare that it will not charge the full £9,000 tuition fees next year.
Academics voted against charging the full fees by just one vote. Instead the annual tuition fee for UK and EU undergraduates will be £8,500.
It is the first of the elite Russell Group universities to charge less than the maximum.
A large number of the universities in the group, including Cambridge, Oxford, Nottingham and Imperial College London, will be charging £9,000 for the 2012 academic year.
An LSE spokesman said the fee sends a "clear message" that it welcomes pupils from "all backgrounds".
The fee takes into account "arguments of principle", said a statement released by the university.
A close vote from the LSE academic board determined the new fee, with 67 members voting to charge the £9,000 fee and 68 members against it, said the spokesman.
Professor Judith Rees, LSE director, said: "We are determined to preserve academic standards and ensure that all students with the ability to benefit are not deterred from applying to LSE.
"In recent years we have put a great deal of resource into widening participation activities and are delighted that we can now expand these.
"Our new fee package allows us to provide exceptional value for all students while continuing to target funding on the poorest."