A DRAMATIC fall in the number of Scottish postgraduate students over the past decade is threatening the country's future economic competitiveness, the Education Secretary will warn.

Michael Russell will today announce the setting up of a working group to examine why fewer Scots go on to further study after graduating.

The move comes after figures show the number of postgraduate Scottish students studying in Scotland fell by 22 per cent between 2004/05 and 2012/13 - from 22,340 to 17,325.

Unlike undergraduate students, postgraduates have to pay tuition fees which can range from £2,500 to £9,000 a year.

The group will be announced during a keynote address by Mr Russell at a conference on the future of higher education, organised by Edinburgh-based Holyrood magazine.

Mr Russell is expected to tell the conference: "Scotland needs graduates with professional skills and if the decline is not addressed there is a risk to Scotland's ability to remain economically competitive in the longer term.

"The working group will seek the views of students and universities to ensure that a package of support to meet their needs can be put in place."

Mr Russell said the group would also investigate whether the current arrangement, where only certain courses attract tuition fee loans, is a barrier to participation.

The review was welcomed by Alastair Sim, director of Universities Scotland, which represents university principals.

He said: "We have seen a worrying decline in the number of Scottish students taking up postgraduate study at exactly the same time when employers and economic projections tell us Scotland will need these high-level, professional skills.

"Other economies are investing heavily in this level of study and Scotland is at risk of falling behind.

"Research amongst students has found considerable support for loans to be made available to those studying at this level and we feel this would open-up this option to many more students."

Gordon Maloney, president of student body NUS Scotland, also welcomed the review.

He said: "For too long now prospective students have been unable to progress to a postgraduate degree without incurring significant levels of commercial debt or having high personal savings.

"Equally, we need to look at the fee levels our universities are charging for postgraduate degrees and ensure they match the support available, otherwise we risk keeping many financial barriers in place."

The new working group will be chaired by Professor Bryan MacGregor, vice-principal of Aberdeen University, and is due to report next year.

The issue of attracting more Scottish postgraduates has long been a concern. In 2012, Professor Sir Timothy O'Shea, principal of Edinburgh University, said a larger pool of skilled workers was vital to allow Scotland to compete globally.