Scottish MPs from all sides of the House urged the government to remove what has become known as the "Scottish anomaly", by accepting an amendment to the Teaching and Higher Education Bill.

But after two hours of debate the amendment, proposed by the Conservatives during the third reading of the Teaching and Higher Education Bill, was rejected by a vote of 300 against 172, a government majority of 128.

Protesters noisily lobbied MPs outside Parliament earlier in the day

It is the last time MPs can debate the Bill before it goes back to the Lords.

At least 13 Labour backbenchers abstained in a vote on a Tory bid to end what they described as "discrimination" between students from different parts of the UK.

Those abstaining included leading leftwingers Ken Livingstone (Brent E), Tony Benn (Chesterfield), Jeremy Corbyn (Islington N), Audrey Wise (Preston) and Lynne Jones (Birmingham Selly Oak).

The amendment was to get rid of the differentiation in fees paid by Scottish residents who go to Scottish universities and other UK residents who go to Scottish universities.

At present, because Scottish Highers are a one-year course, degrees at Scottish universities are typically four years long, rather than the basic three years at universities in the rest of the UK.

However, whereas Scottish residents who go to their native universities will have to pay three years' fees - with the government picking up the bill for the last year - those from elsewhere in the UK will have to pay for all four years.

The Conservatives, led by the new Shadow Education Secretary, David Willets, said that the fact that the government did not want to remove that anomaly meant it was sanctioning different treatment for UK residents based on where they live.

John McAllion: "The policy has damaging implications"

Scottish MPs from both sides of the House expressed the fears of Scottish universities in their constituencies.

One of Labour's own backbenchers, John McAllion (Dundee East), argued that the Bill, as it stands, will make Scottish universities unattractive to non-Scottish UK residents.

He said some Scottish universities, such as Edinburgh and St Andrews, are attended by high percentages of non-Scots and would be seriously affected by the policy which might deter English, Welsh and Northern Irish residents.

The issue of EU students was also raised. Euro-sceptic Sir Teddy Taylor, himself a Scot, continually intervened in the debate to say that a under the system outlined in the Bill a student from Barcelona would pay less fees than one from Berwick.

He also asked: "What constitutes a Scottish resident?" He said that it would be those on lower incomes who would suffer and that it would have a negative impact on applications to Scottish universities.