He  (right) was talking to the New York Times reporter as one of the economists in a joint working group convened by the Scottish government and Scottish universities to address the financing of university education.

Scottish public funding of higher education kept pace with English funding paid for in part by Scottish voters and in part by the annual subsidy to the Scottish budget by the British government under the Barnett formula.

“This time in England they are substituting student fees for taxpayers’ money,”  he said and the changes in financing in England put Scottish universities in “a very tough position.”

“The whole point of introducing fees originally was to increase the flow of cash,” he said. “If the government in Westminster moves a big chunk of higher education spending off the balance sheet by calling it ‘student loans,’ over time that will also affect the Barnett formula calculation of how much money goes to Scotland.”

“It was accepted that universities who wanted to compete internationally needed more funding. Now English universities will be able to charge fees that more than compensate for the loss of central government funding, which will leave Scottish universities at a growing disadvantage.”

Dr. Muscatelli’s (left) group forecast that disadvantage at £93m a year “on the assumption that fees in England would only rise to about £7,500 a year” — the government’s target figure.

“In fact most universities are charging much more than that. At £8,500 a year the gap rises to around £300m, and if they all charge the full £9,000 — as they seem to be doing — it goes even higher.”

The problem is worsened by European Union regulations, which forbid charging students from other member states any more than local students. Last year more than 16,000 students from the EU studied at Scottish universities, fees paid for by British (mostly English) taxpayers.

Frances Cairncross, (right) rector of Exeter College, Oxford and an economic adviser to the Scottish government, alluded to the resentment English families feel when their taxes are seen to be subsidizing the education of EU nationals in Scotland, while their own children are forced to take out loans.

EU regulations do allow Scotland to charge tuition fees to English, Welsh and Northern Irish students. Michael Russell, the Scottish education secretary, hinted that if the Scottish Nationalists won the election, this fee, currently £1,820 a year, might rise to £6,500 or more.

Scottish students who study elsewhere in Britain already pay fees, but numbers of British students from outside Scotland attending Scottish universities is more than twice as high as Scottish students who study abroad.

“We cannot allow our universities to become a cheap option for students who have to pay to study in their home countries,” Russell said recently.

The National Union of Students (NUS), rejects higher fees for non-Scottish students, according to spokesman Mike Heffron. Lord Sutherland said such a high differential would “create a very unhappy atmosphere at Edinburgh and Saint Andrews,” two Scottish universities popular with students from south of the border.

Like Ms. Cairncross, Lord Sutherland sees tuition fees in Scotland as inevitable. “Only you can bet your boots they won’t call it a fee,” he said.

Dr. Muscatelli said that without some additional source of financing, Scotland, which has more highly ranked universities than any other country of its size, would be unable to retain its pre-eminence.