David Cameron and Nick Clegg were accused tonight of "total hypocrisy" in appointing Simon Hughes as a champion of access to higher education after Labour claimed funds designed to encourage disadvantaged pupils had been cut from £360m a year to £150m.

Pat McFadden, business minister in the former government, accused Downing Street of piling "dishonesty upon betrayal" after cutting the funding.

"It is total hypocrisy to appoint a champion for higher education participation if money for this purpose is to be cut," McFadden said. "This would be a complete betrayal of the very students we want to help most."

In the run up to the vote on trebling university tuition fees Clegg attempted to assure Lib Dem MPs by unveiling a £150m National Scholarship Programme aimed at poorer pupils. But the Browne review, used by the coalition as the basis for increasing tuition fees, said £360m was being spent in the current financial year by the Higher Education Funding Council for England (HEFCE).

The Department for Business said it was not possible to draw a comparison between the two sets of figures because the HEFCE will decide how much of its £9bn grant for next year to devote to helping disadvantaged students. Labour says this budget is being cut in real terms.

McFadden spoke out as Hughes defended his appointment after abstaining in the vote to treble tuition fees. Asked on Sky News whether he was abandoning his principles, the Lib Dem deputy leader said: "No, it is not hypocritical." Hughes told Radio 4's The World at One that he had abstained because of his fear that pupils from poorer backgrounds would be put off applying to university.

"I wouldn't vote for it because I believed that with the higher rate that could go … up to £9,000 a year that could put people off applying. The problem with the system is the perception rather than the reality."

There was encouraging news for Clegg when a Sky News poll of 39 Lib Dem MPs, including the former leaders Sir Menzies Campbell and Charles Kennedy, found they all supported the coalition.