Labour's "record" funding for students

"Labour introduced graduate fees on top of record high levels of public investment to allow universities to improve quality and expand further." John Denham, Shadow Business Secretary, The Guardian 9 December
The claim from Labour's Shadow Minister all depends on how you break down the university funding.
Taking figures for total Government funding for UK universities the data shows that in real terms university funding in 2008 was the highest in real terms it had been since at least 19651, as the graph below shows.

But using the information in such a way ignores a crucial point in the debate about student funding, one that Mr Denham alluded to himself during yesterday's debate.
He told MPs: "Between 1989 and 1997, under the previous Conservative Government, public funding per student fell by 36% in real terms."
Looking therefore at funding on a per student basis, the case for Mr Denham to claim "record high" levels of investment in universities is weakened.
The percentage decrease Mr Denham quoted is used in the Lord Browne's review of higher education funding, but made its first appearance in a 2003 White Paper.
The problem for Mr Denham is that following this decline in per unit (ie per student) funding, under Labour the amount did not return to let alone surpass past heights.
Research produced in 2009 by the House of Commons Library shows the scale of the decline in per student public funding for higher education.

While the decline was arrested, and the introduction of fees boosted the amount of funding per student, it cannot be said to be hitting record levels.
Of course, it is worth keeping in mind there are certain economies of scale to be had in higher education, for example twice as many students attending a university would not necessarily require it to spend money to double the number of lecture theatres available.
Conclusion
In terms of overall funding the statement from John Denham checks out. But this ignores the crucial factor of the huge increase in student numbers.
This expansion of the student population means that funding per head is as relevant if not more so to any historical comparison being made.
The figures show that on a per student basis Labour did not achieve record levels of funding. While the reduction in per student funding may have been arrested it certainly did not reach record levels. 

1 Carpentier, V., Historical Statistics on the Funding and Development of the UK University System, 1920-2002 & Treasury GDP Deflator