English top-up fees are potentially "much, much more problematic" for Scottish universities' competitiveness than more concentrated research funds, the chairman of the Scottish higher education funding council has told MSPs.
Chris Masters, giving evidence to the Scottish Parliament's enterprise and culture committee, which is investigating the impact of the English white paper proposals on Scotland, said it was crucial to have a broad equilibrium in terms of funding between the two countries.
Dr Masters said that competition in the UK for students and staff was on a reasonably equal footing. But if the funding per student were significantly increased in England, Scottish higher education would face an inevitable decline in quality and morale.
There were so many unknown factors that it was unrealistic to predict the extent of the gap that would open up, or how students' choices would be affected, he said.
But he warned of an exodus of staff if there were markedly better prospects in England in terms of salaries and facilities.
Rami Okasha, president of the National Union of Students Scotland, said thousands of Scottish applicants risked being squeezed out because of a surge of English applicants seeking Scottish places to avoid top-up fees.
Many admissions tutors would consider English A levels superior to Scottish qualifications, he claimed.
But Mr Okasha questioned whether there would be a funding gap between Scottish and English institutions. He said it was very unclear whether top-up fees would represent a new funding stream. The funds from tuition fees had in effect been withdrawn, pound for pound, from institutions' grants, he said.