Students would be able to get a degree in two years rather than three - and save a year's living costs.
But universities would be able to charge students the price of three years of tuition fees for these accelerated two year courses.
This would make annual fees in England higher than many US state universities.
Universities Minister Jo Johnson told university leaders such flexibility would make courses more attractive for mature students and disadvantaged youngsters who might be put off by a full three year degree.
Mr Johnson said that charging three years' fees for a two-year course was fair - as this was not a dilution of quality.
"It's not fewer credits, or lower quality of provision, it's the same standard, the same quality, but in a compressed period of time and that involves an increase in resources, which needs to be recognised in the fee structure," said the minister, speaking after a speech to university leaders in London.
"There are clear advantages for the student," he said, such as saving a year's living costs and allowing them to get into employment more quickly.
But the UCU lecturers' union warned that the main beneficiaries would be private, for-profit providers, who could adopt a "pile 'em high and teach 'em cheap" approach.
The Russell Group of leading universities said this would need "careful consideration" so that these shorter course "don't negatively affect student learning or compromise the overall undergraduate experience".
But Universities UK said it would be "a good thing" if regulations over tuition fee limit could be changed to allow such flexibility.
Labour's Gordon Marsden said: "Is it yet another example of their using their new higher education legislation as a Trojan Horse to let tuition fees rip?"
There have been attempts to promote shorter courses in the past - but there has been little financial incentive for universities to run fast-track degrees if the amount they received in fees was also reduced.
Concerns have also been expressed about a two-tier university system - with better-off students able to pay for a full three-year experience.
The proposals, likely to be introduced by 2020, would allow universities to sign students up for a two-year degree and receive the same fee income as a three-year course.
The government has announced a fee increase to £9,250 per year - and then annual increases in line with inflation - which will push a three year course above £28,000.
The shorter course would see this divided over two years - but missing the third year would mean that students and their parents would face lower costs in accommodation and living expenses.
This also reflects concerns about the lack of "contact time" for some university courses - with some students only receiving a few hours a week of seminars and lectures and long holidays in the summer and at Christmas.
A shorter time in university would allow students to begin working at an earlier stage and repay their loan debts.
Mr Johnson said that this would not mean any "flight" from the traditional three-year degree, but would provide an alternative for those wanting a different approach from a traditional three year residential degree.
"Take from example, someone who is in their mid to late twenties, who didn't go to university, who has already been in the workforce but wants an opportunity to retrain and acquire a level of skills they haven't got," the minister said.
"They don't want to spend three years studying and want a faster pace of learning than the classic three year model would allow."
Mr Johnson also announced plans for universities to reveal more detailed information about the attainment levels of different groups - such as ethnic minorities and disadvantaged youngsters.
There are also plans to make it easier for students to move between universities or courses.
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