Cable warns over pounds 9,000 tuition costs.
The Cabinet Minister, speaking to higher education representatives at Aston University, hit out at universities in England planning to charge students the pounds 9,000 top rate.
Mr Cable threatened to take places away from campuses which failed to fill places as a result of the higher fees.
Addressing vicechancellors at a conference, he said: "Think carefully about what you believe students are prepared to pay for your services."
His warning comes as many universities have announced plans to charge the full tuition fees of pounds 9,000 from 2012.
On Tuesday, the University of Central Lancashire - a former polytechnic - said it would charge pounds 9,000 a year.
On the same day, the University of Portsmouth and London South Bank University, both former polytechnics, announced they would charge pounds 8,500 and pounds 8,390 respectively.
All fees will have to be approved by the Office for Fair Access (Offa).
Speaking at the Higher Education Funding Council for England (Hefce) conference in Birmingham, Mr Cable said many students had had intensive teaching in sixth-forms and would have high expectations of university teaching.
"Students will search for value for money and compare the offers of different universities," he said.