Scotland could have one of the most restrictive visa regimes in the world for overseas students under UK Government plans to crack down on immigration, it is claimed.

According to Universities Scotland, which represents university principals, the policy to reduce the number of visas for those coming from outside the European Union will make visa conditions tougher than in the US, Canada, Australia and Germany, all of whom are in direct competition for students.

The organisation also points out that students from countries such as China and India pay significant fees to study in Scotland, providing a crucial source of additional income for universities, particularly at a time of public funding cuts. Such funding also allows Scottish students to study fee free.

The UK Borders Agency’s public consultation on reform of the student immigration system closes at the end of this month. It does not propose a specific cap on student numbers, but universities argue the changes are so restrictive they will put Scotland at a major competitive disadvantage.

In particular, they are concerned at proposals to limit employment rights, including work placements that are part of a degree, as well as employment between undergraduate and postgraduate study. In addition, the measures would restrict the right of a student’s family to come with them.

Universities Scotland has now written to all MPs calling for support for a separate immigration policy for Scotland. Alastair Sim, the organisation’s director, said the UKBA proposals posed a big threat to universities.

‘At the same time as university funding is cut across the UK and universities are told to increase their income from other sources, we face a set of proposals which will completely undermine our ability to succeed in what is already a highly competitive market,’ he said.

‘Scotland’s economic and demographic circumstances necessitate a different approach to England. A Scottish solution is needed,’ he added.

Richard Speight, vice principal of the City of Glasgow College, which recruits 1,500 overseas students every year bringing in £3.5 million in fees, said that colleges are also concerned.

The income raised from international student fees was worth a total of £188 million to all 20 of Scotland’s universities in 2007/08. Taking the sector as a whole, international students account for approximately £16 of every £100 Scotland’s universities receive in income for teaching grants and contracts.

‘The Government expects the student route to make its contribution towards reducing net migration. Too many students coming to study at below degree level have been coming here to live and work, rather than study. We need to stop this abuse and be more selective about who can come here and how long they can stay,’ said a Home Office spokesman.