University graduates could be given a major tax cut to help win back millions of young voters who have abandoned the Conservatives, under plans being considered by ministers.

Senior Government figures are understood to be studying proposals for a "tax cashback" of 50p for every pound repaid by the two million graduates paying back their student fees.

The plan is set out in a new report by Onward, an influential think tank run by Theresa May's former policy adviser.

It comes after Jeremy Corbyn's promise to scrap university tuition fees was identified as a major factor behind the Conservatives' dismal performance in the 2017 general election.

The paper has been co-written by Neil O'Brien, the parliamentary private secretary to the business department, with a foreword by Gillian Keegan, another Conservative MP who is an aide to the Treasury. It is understood to be under consideration by Philip Augar, a former director of the Department for Education, who is leading a major review of post-18 education commissioned by Theresa May, as well as by ministers and Downing Street advisers.

The report states that, unlike Mr Corbyn's plan, a tax cut for graduates would benefit those who have already left university, as well as future graduates.

It proposes that the tax cut should be funded by "diverting" students away from courses whose graduates earn the lowest salaries, towards technical education, apprenticeships, and other university courses.

Many students taking the "lowest-value" courses are unable to repay their loans, with some failing to reach the £25,000 income threshold at which they are required to make the 9 per cent payments.

Will Tanner, Mrs May's former deputy head of policy, who is now director of Onward, said: “If the Conservatives are serious about reversing their collapse among younger voters over the last few years, fixing Britain’s broken student loan system must be a high priority. A graduate tax cut would be a clear retail policy to treat all graduates fairly and put cash back in their pockets, unlike Labour’s pledge to help only future students earning the highest salaries.”

Mr O'Brien, who is parliamentary private secretary to the Department for Business, Energy and Industrial Strategy, said: "A graduate tax cut would help people regardless of whether they are studying now or have already left. In contrast Jeremy Corbyn's half-baked policy would do nothing at all for anyone who has left university ... We have to offer real help to young graduates hit by high marginal tax rates and high house prices, not promises that are torn up the day after an election."

Onward warns that higher-rate paying graduates pay 51 per cent marginal tax rates, comprising 40 per cent income tax, 2 per cent national insurance contributions and 9 per cent in student loan repayments.

"Having abolished the 50p tax rate for those earning over £150,000, policymakers should not expect young graduates earning a third of that to pay a 51 pence rate," it states. According to the report, a recently-graduated couple earning £35,000 and £40,000 would be £1,125 a year better off as a result of the 50 per cent cut in loan repayments.

In November it emerged that an early draft of Mr Augar's report, a final version of which is due to be passed to ministers this month, suggested cutting tuition fees to between £6,500 and £7,500 a year, with the shortfall made up by the Treasury. Onward states that such a move, or an overhaul of interest rates, "may have some effect" but would "considerably increase the stock of debt that the Government would have to write off after 30 years - which will already add £28 billion to the deficit in 2049-50."

Replacing student loans with a graduate tax would leave most people paying roughly the same amount as before and create "perverse incentives" for bright graduates to leave the country to avoid paying back the cost of their course, it adds.