THE Con-Dem government fell into disarray over student loan privatisation yesterday after Vince Cable publicly abandoned the policy. 

The Business Secretary stunned his Tory bedfellows by telling Lib Dem activists he’s scrapped the sell-off.

Mr Cable told a meeting of his party’s Social Liberal Forum faction at the weekend that evidence has disproved the claim that loan privatisation will cut national debt. 

“Given there is no longer any public benefit, Nick Clegg and I have agreed not to proceed with the sale,” he said, according to the Guardian. 

But a Downing Street spokesman insisted yesterday his Tory colleagues were “not aware of any change to the policy.”

He said: “The government will continue to be guided by what’s in the best interests of the taxpayer.”

Mr Cable scrapped the policy just a day before a report was due from Parliament’s business committee, which was expected to warn against his sell-off plans.

MPs have concluded the government has not proved “whether or not selling these assets represents good value for money.”

Committee chairman Adrian Bailey said independent advice showed selling graduate debt racked up before 2012 would land the government £2-10 billion short of its estimate. 

Student protests were sparked when secret plans for the sell-off penned by Rothschild bank for ministers were exposed in November. 

Activists said the U-turn proved the power of protest to change government decisions. 

The National Union of Students celebrated the policy's death, but said Mr Cable must be held accountable for his part in the plot. 

President Toni Pearce said: “He needs to make this decision official immediately, and recognise that we will only achieve a sustainable higher education funding system if we abandon the discredited regime of sky-high fees and debts.”

With uncollected student debt set to soar to £330bn by 2044, the Con-Dems' trebled tuition fees system also came under scrutiny from MPs.

Mr Bailey added: “Government need to get its act together and properly calculate how much of these student debts are ever likely to be paid back.”