A Federal Government move to sideline a $1.9 billion budget cut to higher education courses and push ahead with fee deregulation has failed to sway the Senate crossbench.

The measures – fee deregulation and the funding cut – were at the heart of the Coalition’s university overhaul, which seemed doomed to fail for a second time in the Senate and have now been split into two separate pieces of legislation.

The original bill faced heavy opposition, with only one crossbench senator out of eight publicly prepared to back it – far short of the six votes required.

• ‘F’ for fail: Pyne reforms slammed by senate
• Pyne splits university bill as senate sweetener
• Senators vow to block university deregulation

But hiving off the budget cut to a separate vote has not won over the vote – with at least five crossbench senators telling the ABC they will not vote for the core deregulation legislation.

“I do not support the Abbott government’s higher education measures,” Independent Queensland senator Glenn Lazarus told the Senate on Monday afternoon.

“Once the deregulation switch is turned on, it will be impossible to turn it off.”

Senators Nick Xenophon, Jacqui Lambie, Dio Wang and David Lejonhjelm also remain opposed to the changes.

The ABC has also learned the Federal Government’s own Research Infrastructure Review Panel felt the science research funding situation was so serious it had too step in.

It is unclear what Education Minister Christopher Pyne may do next in his battle to push the package through.

“We could not have done more to meet the issues of the crossbench,” he told Sky TV.

The deregulation legislation is set to be debated this week and may result in putting further strain on the federal budget, as it includes a multi-million dollar extension of student loans to TAFE and college students.

Mr Pyne has also backed down on his threat to withdraw $150 million for research unless the Senate passed the higher education package.

He said he wanted the deregulation of the university sector to “stand and fall on its own merit” without the $1.1 billion budget cut to course fees.

“So two debates can be held – one on the Government’s deregulation agenda, which we see as having extraordinary benefits for students and universities,” he said.

“And we’ll have a separate debate around the Government’s reduction of the Commonwealth Grant Scheme to gain savings.”

The Minister said the Government was still committed to cutting federal funding of course fees and expected that separate legislation to be introduced to parliament after the May budget.

University sector welcomes withdrawal research funding threat

Universities Australia chief executive Belinda Robinson, who fronted the press conference with Mr Pyne, said the decision effectively meant the budget cut had been dumped.

“The Government has finally listened to that point and has removed the 20 per cent cut or split the bill so there will be no 20 per cent cut,” she said.

Ms Robinson also welcomed the withdrawal of an earlier threat to cut funding for the National Collaborative Research Infrastructure Strategy – a cut which could have cost hundreds of jobs.

Mr Pyne said he had guaranteed the funding for a further 12 months, while a broader review into research funding was underway.

“I found the money in offsets which will be revealed in the budget,” he said.

Opposition Leader Bill Shorten pursued the Government over the backdown, putting to the Prime Minister that it was “just another chaotic decision from an incompetent (government)”.

Mr Abbott instead declared it was “clear evidence” the Government was seeking to cooperate with the crossbench.

The Greens have called on Mr Pyne to dump the idea entirely.

“It’s time for Mr Pyne to put it out of its misery,” Education spokeswoman Lee Rhiannon said in a statement.

– ABC