Plans to deny student loans to those with lower A-level grades would hit poor families in regions where social mobility is already stalling, data obtained by Education Guardian shows. In the north-east a third of students who would be denied a university education come from the most disadvantaged backgrounds.

Four months ago, the education secretary, Damian Hinds, launched Opportunity North East, a £24m campaign to raise aspirations and stop children in the region feeling they’ve been “left behind”.

But the prime minister’s review of post-18 education is, according to leaks, proposing that young people with less than 3Ds at A-level should not be allowed a loan.

Data from Universities UK, the vice-chancellors’ umbrella body, shows the change would hit the north-east – where 33% of students with lower than 3Ds are from the most disadvantaged families – much harder than any other region.

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A prominent Conservative MP, who asked not to be named, told Education Guardian: “Are we seriously saying young people in the north-east are thicker than those in the south-east so they don’t deserve to go to university? This is penalising young people for failures in the school system.”

The north-east has the worst youth unemployment rates in the country, and although it has some of the best-performing primary schools, poorer children are much less likely than in other regions to have access to a good secondary school, according to the Social Mobility Commission.

The MP adds that the policy wouldn’t stop students from wealthier backgrounds who perform badly at A-level from going to university, because their parents could pay for them to do retakes or simply bypass the loans restriction by pay their fees.

“Tarquin still gets into university. But you create a secondary modern/grammar school situation where some people are just written off,” the MP says.

The second-hardest-hit region in terms of social mobility would be Yorkshire and the Humber, where UUK’s data shows that 22% of those no longer entitled to a loan would be the most disadvantaged students.

Vice-chancellors have branded the idea hugely regressive. They say poorer students are more likely to have low attainment, but this doesn’t mean they can’t succeed at university – and that universities, not the government, should make judgments about who has potential.

Alistair Jarvis, the chief executive of UUK, says: “If the government is looking for a policy that keeps large numbers of students from lower socio-economic backgrounds out of university, it would be hard to come up with anything more exclusionary than setting a flat minimum entry tariff.”

He points out that there is an attainment gap of more than four months between disadvantaged children and their classmates when they first start school, and this rises to more than 19 months by the end of secondary school.

But he says students can overcome this disadvantage and thrive at university, with 73% of students from the poorest areas netting a first or 2:1 degree.

Anand Shukla, the chief executive of social mobility charity Brightside, says: “Attainment at the age of 18 is not a measure of potential at all. It is typically a measure of the amount of resource you’ve been able to benefit from at school.”

The PM’s review, which is being chaired by former equities broker Philip Augar, is also widely expected to recommend cutting £9,250 university fees to £6,500.

Sources close to the Department for Education say that No 10 is keen to go public with the review’s recommendations as soon as possible, to demonstrate that “domestic policy is back on track” despite the chaos surrounding Brexit. But they say the Treasury wants to delay publication until the next spending review.

Vice-chancellors fear the review is being used as a means of pushing more students who would have gone to newer university into further education instead. One leak said Augar’s team was considering offering loans to college as well as university students.

Shukla says more support for FE would be a good thing because it has been “neglected and underfunded for years”. But he warns: “We need to be very careful about creating a segregated system in which richer students go to university and poor students are hived off down a different route.”

He adds: “Britain is a very class-ridden country. If students with lower grades are funnelled in one direction and students with higher grades in another direction, I think we all know how that story ends.”

Claire Callender, professor of higher education policy at UCL’s Institute of Education and Birkbeck, University of London, says: “You could argue that we need more vocational training, but if we push more people into the FE sector are we really sure they will get jobs? We know employers really value degrees.”

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She says that if employers want graduates and there is a shortage of them, graduate salaries will rise. “That means there will be an even greater divide between those who have been to university and those who haven’t.”

According to the CBI, 79% of employers expect to need more staff with higher skills in the future, with two-thirds saying they aren’t confident there will be enough people to fill highly skilled jobs.

One source close to Westminster says: “Augar is doing the easy part because he will say fees must be cut but the funding per student should stay the same. But the DfE knows the Treasury can’t do that. Even if they put in a bit of funding in the first year, within three years it will be gone.”

University heads say that if they have to shoulder a loss of £3,000 per student, spending on trying to encourage more disadvantaged young people to come to university will be one of the things they will have to cut.

The VC of one Russell Group university says: “I don’t think they are thinking through the consequences of all this. If we face cuts of this size, some of the investment we would immediately have to cut would be on outreach.”

Prof David Green, vice-chancellor of Worcester University, says he has heard other universities saying they will have to cut widening participation budgets, but that this is a grave error. “If we threaten to cut the widening participation budget we threaten our students, our raison d’etre and our institutions.”

At present universities are required to invest 30% of all fee income over £6,000 to widening participation programmes.