There is concern Scotland could lose out on research

Principals have told a Holyrood inquiry that ministers will need to find the extra cash for higher education by the end of the decade.

They warn that the funding is desperately needed to avoid economic decline in the future.

Funding experts have warned that top-up tuition fees in England could leave Scottish universities at a competitive disadvantage.

Inaction now will allow that process to reduce our status, capacity and ability to benefit society and the economy Universities Scotland

Dr Andrew Cubie and Professor Arthur Midwinter said English higher education institutions (HEIs) could be in a stronger position to attract leading academics and research teams.

The Enterprise and Lifelong Learning Committee is examining the possible effects of Whitehall plans to allow popular institutions to increase the annual fixed tuition fee at English universities to as much as �3,000 per student per year from 2006.

Umbrella organisation Universities Scotland has estimated that top-up fees could mean an extra �1.4bn for English universities every year.

In a joint statement, the universities said: "Some English institutions will be able to use the increases in income to leverage in loan finance to further invest in student, teaching and research infrastructure.

'Best performers'

"This would be a serious concern as it would increase the attractiveness of English HEIs to gifted students and academics and ultimately weaken the ability of the Scottish sector to secure research and other funding awarded by competitive bidding."

Sir Philip Cohen, life sciences research professor at the University of Dundee, said that almost half of the 20 bio-tech companies in the city have been started by individual researchers.

"Most of others have arisen because companies come into the area because they want to interact with scientists working at the university," he added.

The universities have called on the Scottish Executive to spend an annual �43m for the next five years in order to match competing countries.

'Ongoing threat'

They said: "If the vision of a smart successful Scotland is to become reality it is imperative that our sights are set higher, and that we try to match the best performers among the OECD countries.

"If resourced appropriately our higher education system can support excellence right across the country ensuring the student experience is of uniformly high quality and that the science and research base is maintained and strengthened.

"The threat from England and elsewhere is an ongoing process not a single event, but inaction now will allow that process to reduce our status, capacity and ability to benefit society and the economy."

Lewis Macdonald: "Maintain competitive advantage"

However, Deputy Enterprise Minister Lewis Macdonald said English universities were starting from a position of financial disadvantage.

He said: "The differential at the moment is very substantial between the spend per head at universities in Scotland and the spend per head in universities south of the border.

"Certainly the changes you are describing do point towards the English universities beginning to close that gap.

"What we need to do is to maintain our competitive advantage in the wider world.

"The spend per head on universities in Scotland at the end of the current spending period will still be significantly ahead of that south of the border."