I’m not sure that’s true. I think the proposals may have been phrased that way to appeal to some of the backbenchers, but the end result lacks all elements of an actual market:

1) Student places are still controlled through HEFCE. Indeed, one of the threats the government made to universities considering high fees was that they might not get given extra quota places. So supply of places is effectively fixed, and the national total is lower than the demand. Prices will therefore be high as there’s no competition.
2) Students are not paying for the places with their own money. The level of repayments they need to make will not differ significantly between a 7k fee and a 9k fee (and those graduates for whom it does differ will be the ones earning over 35k a year who can quite easily afford that difference). There’s therefore no financial incentive to seek out a cheaper alternative.

Combine the two and it’s obvious that there is no chance of HE being subjected to market forces, and 9k fees all round were inevitable. (I expect the third of universities charging marginally less will increase their fees to 9k after the initial shock of adjustment has worn off)