The competition ends on 20 October
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Students are being offered the chance to have one year's tuition fees paid for - by texting the Conservatives in protest at the policy.
The party's youth wing, Conservative Future, is calling on students to use their mobile phone to join an electronic "petition" against government plans for top-up fees.
The Tories - who say they will scrap tuition fees if they win the next general election - claim it is the first time a political party has conducted a protest by text messaging.
The winning student, who will be selected randomly, will receive a cash prize of £1,125 - the equivalent of a year's tuition fees.
But Phil Willis, the Lib Dems education spokesman, said: "When Tory policy descends to prize draws you know that not only have they got nothing to add to the education debate, but that they have completely lost the plot."
The competition was launched on Wednesday at the University of East Anglia in Education Secretary Charles Clarke's Norwich South constituency.
David Pugh, national organiser of Conservative Future, whose team dreamed the idea up in a pub, said he hoped the results would send a strong message to the government, which is determined to allow universities in England and Wales to charge higher tuition fees.
'Why wait?'
"A lot of young people are disengaged from the political process and feel let down by the government over tuition fees," he told BBC News Online.
"We want to use text messaging - a new initiative no other political party has used - to get them involved in politics.
"It is a light-hearted campaign and what we are saying is two years is a long time to wait before we can scrap tuition fees, so enter our competition and win the chance to have a year's worth paid for now.
"It is a bit of fun but has a serious message."
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Text messaging is a universal way young people - and older people - stay in contact, and this campaign is a way of drawing attention to our policy
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To enter the competition, students are being asked to text "No fees 4 [name of university]" to the Conservatives at "81222".
They will then receive a message back telling them that the winner will be announced on the Conservative Future website on 25 October.
Each text will cost between 10p and 12p, depending on the network, but the Tories say they will not benefit from the cash.
Mr Pugh said the party had no plans to create a database of students who join in the "No fees, no small print" campaign - instead it will be their decision whether to get back in touch.
About 80 universities will be targeted with leaflets and posters advertising the competition, which was also being launched on Wednesday at campuses in Swansea, Manchester, Birmingham, Nottingham and Guildford.
'Differential fees'
"It is not a case of bombarding people with text messages, but to get people interested in politics," insisted Mr Pugh.
Damian Green, the shadow education secretary, who kicked off the competition in Norwich, said the results of the protest will be presented to the government.
"Text messaging is a universal way young people - and older people - stay in contact, and this campaign is a way of drawing attention to our policy," he told BBC News Online.
"We have already announced our plans to abolish all tuition fees. Now we are hoping to students will join the campaign by joining our electronic petition."
Currently, universities charge a flat £1,125 a year for all undergraduate courses, but ministers want to allow institutions to charge "differential fees", as they call them, of between nothing and £3,000 a year for their courses.
The fees would be in the form of a loan paid back by students upon graduation, rather than paid upfront as they are now.
Mr Green said the introduction of the top-up fees could mean some students leaving university with debts of up to £30,000.
A Tory administration, he said, would ensure admissions to university were based on a student's ability to learn.