The plans aim to encourage more competition and better consumer value for students. The proposals will also make it easier for new universities to open.
Labour's Gordon Marsden warned of "inadequate" controls over a "rapid expansion" in new universities.
The proposals, published in a White Paper called Success as a Knowledge Economy, aim to encourage a wider range of new higher education institutions, by speeding up the process allowing them to award their own degrees.
This could include allowing more private institutions to be given university status.
There are also measures to improve the experience of students, by encouraging better teaching and linking this to increases in tuition fees above the current limit.
Fees will be able to rise in line with inflation above £9,000 for students starting in 2017-18 for universities considered to offer high quality teaching, based on inspections.
The government will announce in 2016-17 which universities will be able to increase their fees.
A further mechanism for measuring teaching quality, the Teaching Excellence Framework, will be phased in over four years.
There are also suggestions that it should be made easier for students to switch courses and universities.
The policy is aimed at encouraging more new and innovative providers into England's higher education system, with ministers saying that the jobs market needs increasing numbers of high-skilled graduates.
But it also wants to address concerns that the consumer rights of students are not being adequately protected.
There are concerns that too many students think the quality of teaching is not good enough or that there are too few teaching hours or insufficient information before beginning a course.
The White Paper is proposing that a watchdog, the Office for Students, should be created.
There will also be encouragement for universities to admit students from a wider range of social backgrounds - with warnings that entry to top universities is still dominated by students from wealthier families.
Universities will have to produce much more detailed information about applications and admissions, in terms of ethnicity, gender and family income.
Source: bbc.com
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