The University of St Andrews has this week led calls for the introduction of a variable graduate contribution system, according to sources at the university.

Lord Browne’s recommendations that English universities be able to charge unlimited tuition fees, has inspired an urgent need among MSPs and higher education leaders to find a solution for university funding in Scotland.

As such, a graduate contribution system, which would enable Scottish institutions to set their own levels for a fee repayable after the completion of the student’s studies, is appearing as an increasingly attractive option if Scottish universities are to remain in competition with their English counterparts.

Sir Andrew Cubie, Chair of the Leadership Foundation for Higher Education, whose inquiry in 1999 recommended the abolition of tuition fees, says it will be very difficult for Scotland to sustain current funding levels without some form of graduate contribution.

Edinburgh, along with the universities of Glasgow and Aberdeen are all believed to be moving in favour of the variable graduate contribution.

Support for this move has also been offered by the Scottish Conservative party along with the National Union of Students Scotland, both of whom have made recent calls for some form of graduate contribution to boost cash-strapped institutions.

They face opposition, however, from many of the newer universities, who fear that that they would not be able to charge as much as the older institutions.

A senior Scottish university official told The Times: "Basically the problem is that the sector in Scotland does not know what it wants. They are struggling to come up with a common line".

Reports last week that the coalition government in England may cut the education budget by two- thirds has only served to aggravate fears.

This is due to the Barnett formula, which gives Scotland a proportion of public spending in England.

Michael Russell, the Scottish Education Secretary stated that there would have to be ‘major changes’ in Scottish higher education.

He faces considerable pressure from his opponents who have criticized his hesitation in halting the potential decline of Scottish universities at the expense of their English neighbours.

Labour and Conservative leaders accuse Mr Russell of refusing to heed their calls over the past two years for an independent review of higher education in Scotland.

In response to such criticism, Mr Russell has declared his intention to bring forward a green paper that will outline funding proposals.

It is unlikely, however, that any legislation will be passed before next May’s Scottish Parliament election.