OVERSEAS students are being put off studying in Scotland because Westminster's immigration policy warns them "we're closed for business", a leading university principal has said.
Professor Anton Muscatelli, the Principal of Glasgow University, said the UK Government's attitude to immigration could harm business development and growth north of the Border.
Mr Muscatelli said: "It's a message that says 'don't come here, we're closed for business, closed for education'.
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"Travelling in the Asian sub-continent, you begin to see how people have perceived what the UK has been doing in the immigration space so negatively.
"It's exactly the opposite message that a number of other countries are sending, including the US, Canada and Australia. I don't think we should be there as a country."
In January, official figures revealed there had been a 4% drop in the number of overseas postgraduates and a 4% fall in the number of foreign students enrolled on first-year degree courses at UK universities between the 2011/12 and 2012/13 academic years.
The steepest fall was among students from India, down 30% year-on-year, as they increasingly opted to study in North America instead.
For Scotland, the decline in overseas students was a less severe 1%, with an increase in students coming to Scotland from China helping to slow the decline.
The decrease in foreign students followed the roll out of tough new visa restrictions by the Home Office in an effort to curb the proliferation of bogus colleges that immigration officials feared were being used like "visa shops".
As a result, overseas students have found it harder to secure a place on UK courses and have limited rights to work after they complete their studies.
The crackdown applies to non-EU foreign students, who earn institutions anything up to £17,000 a year in fees. In 2012/13 Scottish universities experienced a ballooning in their income from overseas students to a record £337 million, accounting for 12% of their total income.
The Scottish Government has pledged to create a more liberal immigration agenda in an independent Scotland, in particular reintroducing the post-study work visa to make it easier for overseas students at Scottish institutions to remain in the country to work after graduation.
However, Scottish Secretary Alistair Carmichael has warned that a split in immigration policy between Scotland and the rest of the UK would create a "real danger" the UK Government would have to erect border posts between the two countries.
Gordon MacIntyre-Kemp, chief executive of pro-independence network Business for Scotland, said: "Scotland's needs are different from those of London and the south-east. Immigration policies imposed upon us by Westminster are yet another example of how a one-size-fits-all policy is failing Scotland.
"With independence, our own elected government would set the policy choices that will work for Scotland, taken on the basis of Scotland's needs and priorities. That will be good for business and for our universities."
A Home Office spokesman said: "There is no limit on the number of students who can come to the UK. We do not accept that changes in the immigration system are deterring international students from coming to the UK.
"Worldwide, the UK remains the second most popular destination for international higher education students and our universities saw increases last year from key markets, including China, Malaysia and Hong Kong."