Students from England will face increased tuition fees at Scottish universities from 2006, the Scottish Executive has announced.
The exact figure has not been fixed but it is expected to range from £1700 to £1900 per year.
The measure will be introduced to prevent Scottish universities being flooded with students from England when top-up fees are introduced there.
Students from Scotland going to English universities will be given extra loans.
Minister for Lifelong Learning Jim Wallace has announced that the executive will fund loans for Scottish students studying in England of up to £3000 per year to enable them to pay for the variable fees associated with their chosen course.
"I am absolutely certain that doing nothing is not an option"
In a statement to the Scottish Parliament, Mr Wallace told MSPs the decisions had not been arrived at lightly, but the executive had an "absolute priority to ensure that Scottish domiciled students were not disadvantaged as a result of the Westminster proposals".
Mr Wallace pointed to the 12% increase in applications to study in Scotland this year by UK students as evidence of the threat posed to students in Scotland.
He said: "I am absolutely certain that doing nothing is not an option."
Measures detailed by Mr Wallace included:
He said European Union rules meant the executive could not pay the increased fees for Scots studying in England - if it did, it would also have to pay the fees for every EU student at an English university.
The minister added: "With full loans for fees and better bursaries, I believe we are making sure that the healthy flow of Scots into universities elsewhere in the UK can continue."
Mark Ballard, higher education spokesman for the Scottish Green Party, welcomed the measures but said the executive should have opposed the charging of variable top up fees by English universities from the outset.
He added: "Undersubscribed courses in Scotland will be at a competitive disadvantage to those in England, who can charge no fees and attract more students, while those in Scotland that are already over or under subscribed will continue to be so."
Tory lifelong learning spokesman Murdo Fraser said the new arrangements would create more problems than they solved.
He said Scottish taxpayers would be subsidising English universities by handing out a subsidised loan to Scottish students studying south of the border.
He also added that English students would be discouraged to come to some Scottish universities because of higher fees at many universities.
He added: "What message is that sending out to English students who want to study in Scotland?
"This does not sit with such initiatives as the Fresh Talent Initiative - to try and encourage talented young students from out with Scotland to come and study here and stay after they graduate."
SNP backbencher Alex Neil welcomed a mix of students but said most were coming to Edinburgh or St Andrews universities and called for consideration of the impact on different institutions.
Liberal Democrat lifelong learning spokesman Jamie Stone sought reassurance the executive would work with the NHS to ensure there were enough Scottish medical students.
Mr Wallace promised that the executive would consider a different fee for medical
institutions.
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