The initial report into the A-level scandal could today recommend that thousands of candidates have their papers re-graded. Education Correspondent Linsay Jennings looks at what may lie ahead for a generation of students.

JUST over a week ago, Education Secretary Estelle Morris said that most students who took their A-levels this year could be "absolutely confident that they have been fairly marked and have the right grades".

Today, most students across the country will be wondering if they have been awarded the right grades, or if they have been crudely manipulated to counter fears of grade inflation.

Former Chief Inspector of Schools Mike Tomlinson was appointed last week by Ms Morris to head the independent inquiry into claims by headteachers that the exam boards had downgraded students to counter claims that A-levels were becoming easier.

Throughout his inquiry, he has interviewed key education players, including Sir William Stubbs, chairman of the exams watchdog the Qualifications and Curriculum Authority (QCA), and examined documentary evidence. Watching the way Sir William has been trying to get to strike the first blow - blaming Ms Morris for interfering in the inquiry by setting up contingency plans for a total A-level regrade - it is likely that the QCA is not going to come out of the fiasco unscathed.

Ms Morris has already acknowledged that, if the inquiry uncovers evidence that large numbers of exam entries were given wrong grades, then it would cause unprecedented admissions problems for universities.

She is facing pressure from headteachers, who are demanding that all 700,000 A-level papers be remarked because they cannot be seen as reliable.

Most universities and the university admissions body UCAS are staying quiet, anxiously awaiting the results of the Tomlinson inquiry today. Universities UK, which represents the executive heads of universities, says: "We are currently looking at all the practical issues, as are UCAS and the funding councils. But this is an unprecedented situation and we still don't know the scale of the problem. Universities are obviously very concerned about the potential impact on students and will continue to be as flexible and helpful as possible, within the constraints they face, for example in terms of funding and space."

The row follows the introduction of the new exam system Curriculum 2000, which was supposed to add breadth to sixth form study. Students take AS level exams at the end of the first year followed by what is now known as A2s at the end of their second year.

Exam grade boundaries, including GCSEs, are adjusted slightly if grades are found to fluctuate wildly from year to year. But the row this year came after claims that the chief executives of the exam boards had overruled earlier decisions by their chief examiners when it became clear there was going to be an excess of top grades. It is mainly independent heads who believe the grades were crudely manipulated to keep down the number of A grades. Many of the fears centre on students' course work with some students failing their course work and gaining grade As in their exam modules.

If there is a total re-marking, students who get lower grades as a result or any regrade, have been reassured by Ms Morris that they will not lose their places at university, and those who get higher grades are likely to be offered places for the following academic year. Any re-marking would be carried out at the regional centres of the exam boards, under the normal procedures. It would be ordered by the QCA, not Ms Morris, who does not have the legal authority to order a re-grade.

But that may not be enough for those students who have been forced to take a gap year because their grades were not good enough for their chosen university, or those who ended up at their second choice.

The prospect of a legal challenge has already been mooted by headteachers. The National Association of Headteachers (Naht) believes there is a case for compensation to students who have been disadvantaged by having their grades marked down. It is likely that any legal moves would involve joint action from independent schools heads, but individual claims cannot be ruled out. What happens, for example, if you are student who has been forced to take a year out because you did not get the grades for your chosen university, and, after a re-grade, it emerges that you would have qualified for your first choice after all?

If there was action taken, says Philip Booth, Northumbria University's legal advisor, it would be likely to centre around financial loss due to the additional year you would lose out on a graduate wage.

"The contractual situation is that if a student is given a conditional offer on, say, getting three grade As, and they get three grade Bs, in that case the university would not normally be legally obliged to accept them onto the course," he says.

"But in the case of re-grading, if they then get their three As, does the university become legally obliged to accept them after all the places on the course have been filled? I would say it would not - the university can't be held to be legally at fault, because it's something which is out of its control. I believe students could only sue the examination boards if they had suffered a financial loss as a result."

But while students who have been forced to take gap years will feel aggrieved, what about those students who have already taken up second choice offers? Those students may find that after a re-grade they had enough points, to get into their first choices and, even though it's a week into the new term, they may decide to try and take up their first preference with their boosted grades.

On the other hand, it could be the universities who start thinking about legal action if students have already signed for a course and are thinking of leaving.

Says Mr Booth: "In that situation, the student would have enrolled with the university and would have entered into a contract to study for at least a year. Strictly speaking, subject to enrolment conditions, it could hold the student to that contract. The university could say you're going to have to pay us our fees.

"If the university were to sue the examination boards because it has lost a student, the boards could say 'get the money from the student'. But people do leave university before the year is out, and the university does not necessarily go chasing them for the whole tuition fee."

In the meantime, it will be the students who are studying for their GCSEs and AS levels who will now be left wondering whether they will be awarded genuine grades in the future. They will have to wait for Mike Tomlinson's second report at the end of November to see if confidence can be restored in Britain's battered education system.