Scots may follow endowment route

Scottish principals may reject top-up fees, but the majority of those responding to our survey think there may be a case for increasing the graduate endowment contribution, currently £2,000, to help plug the funding gap between Scotland and England. There is also a consensus that the burden must not fall disproportionately on students.

Bernard King, principal of the University of Abertay Dundee, said the bulk of US universities built capital reserves through huge tax-exempt endowments from industry and alumni.

The British corporate tax system could, for example, involve small and medium-sized enterprises in funding research from which they would benefit.

Professor King does not fear a brain drain if Scotland is unable to match English salaries. He said: "It would take a substantial bait to override the quality of life and cost of living advantages that Scotland can offer."