LUCRATIVE fee-paying students from England applying to Scottish universities are at record levels despite a sharp decline south of the border, according to new figures.

Statistics from the Ucas admissions service show the number of applications from south of the Border have risen by nearly four per cent to 31,100. The number of English students applying across the UK has fallen by five per cent.

Applications from overseas students in Scotland are also on the increase with numbers topping 17,000 for the first time. However, EU student applications have dropped following the UK's decision to leave the European Union. Overall, the number of Scots applying to study a degree fell by around one per cent to 48,940.

Alastair Sim, director of Universities Scotland, which represents principals, welcomed the increasing interest from students from the rest of the UK.

He said: "As fee-paying students, applicants from the rest of the UK are likely to be attracted to the quality of education on offer in Scotland and very high employment outcomes.

"However, the majority of students from the rest of the UK tend to concentrate in just five Scottish institutions so whilst their applications are certainly welcome, this is not a solution to the funding challenges faced by Scottish higher education."

Luke Humberstone, president of NUS Scotland, also welcomed the increase, but warned against charging higher fees than the current level of £9,000.

He said: "It is encouraging to see more students from England coming to study in Scotland as the English sector becomes synonymous with sky high fees and life-long debt.

"However, the Scottish Government’s recent decision to give universities the power to replicate English fee rises for students from the rest of the UK has the potential to damage our sector’s positive reputation in the future. Rejecting these rises would send a clear statement that Scotland has an open system."

Martin Fairbairn, chief operating officer of the Scottish Funding Council, said: "As with the rest of the UK, Scottish applicant numbers have fallen, but the Scottish reductions are much less than in other parts of the UK, which in part probably reflects key policy differences."

Higher numbers of applicants from the rest of the UK have no impact on the availability of places for Scots who don't pay fees and apply under a separate admissions process.

Last year, figures showed money generated by fees from international students and those from the rest of the UK topped £94 million and accounts for 45 per cent of the sector’s teaching income. In 2010, universities generated just £37m from tuition fees.