IT has been branded "prostitution by the back door" and dropped by PayPal over its controversial sexual content, but the chief executive of a "sugar daddies" dating website which has recruited 450 Scots students in the past year has bizarrely defended the enterprise as a return to what he sees as "traditional" gender roles.

Brandon Wade, the founder and chief executive of Las Vegas-based SeekingArrangement.com, said the website, which advertises men offering up to $20,000 a month (about £12,650) to women willing to be their "sugar baby", said he wanted to promote old-school dating values.

Wade, 42, said: "We live in a society where a lot of men feel that women are equal, and so when they go out on a date, for instance, they will not be very gentlemanly – they expect the woman to go Dutch or they wouldn't open doors for women.

"So when you have a website focused primarily on men being generous and men pampering and spoiling the women they're dating, it seems to have struck a chord with a lot of people out there."

The site promises to link "attractive, intelligent, ambitious" young women with "respectful and generous" older men for a "mutually beneficial" relationship.

Wade's defence of his website came after a table published by the company revealed three Scottish universities were in the top 10 in the UK for female students signing up the service. According to its figures, 154 students from Caledonian – identified by their university email addresses – registered with the website in 2012, putting it in fifth place in the list of UK universities. They were joined by 148 students from Edinburgh University and 147 from St Andrews.

However, the website has attracted criticism for being a springboard into prostitution by encouraging young women to "sell themselves".

Wade, a graduate of the prestigious Massachusetts Institute of Technology (MIT) in the US, established the site seven years ago. Speaking to the Sunday Herald in an exclusive interview, he conceded that the site sits in a "grey area" somewhere between romantic dating and a business transaction, but rejects the comparison with prostitution.

He sued PayPal last year after the online payment giant ditched SeekingArrangement, claiming Wade's business was too sexual.

"We frown upon hourly arrangements," said Wade. "If someone is talking about being a boyfriend or a girlfriend for a few months, that is a different kind of relationship than saying, 'Let me pay you £200 for an hour or two because I want to have sex with you'."

The Singaporean national – who will next weekend celebrate his first wedding anniversary with a "sugar baby" he met through his website – added that it was simply "being honest" to say men are rated by their earning power, while women are valued by their looks.

He said: "If you look at human anthropology with cavemen and cavewomen, those were the qualities we looked for – the most successful men are the best hunters - and were therefore best equipped to take care of a family. Women obviously were rated by their ability to reproduce and care for children. So at a very fundamental level I think that's baked into our genetics. It is superficial – but that's humanity."

With around 10 "sugar babies" to every "sugar daddy" on the site, male users can have their pick of eager young women vying for their affection (and wallets).

A series of profiles provided to the Sunday Herald by the website, purportedly from Scotland-based students, has one 22-year-old talking about going on trips "everywhere from London to Hawaii with my Daddy" and having a £5000-a-month allowance. Another, aged 21, claims to earn £7000 a month from her current arrangement and is on her third sugar daddy in a year.

Andy – not his real name – a finance worker in the City of London who has subscribed to the £40-a-month site for the past year, said he had been wary about signing up, fearing it was "glorified prostitution", but found it fitted with his busy work schedule.

The 35-year-old, who earns around £150,000 a year, dated a 21-year-old Brazilian sociology student for six months at a cost of £2000 a month. He subsequently went out with a 24-year-old trainee hairdresser for three months, "paying" her in luxury shopping trips.

He said: "I liked the idea of having everything on my own terms, which I know is a really selfish thing to say, but it means I get what I like. I do like a younger girl, I like a prettier girl. And there is an element of an ego in there that I'd confess too: if she calls you up and she wants her hair done, you can provide for her."

But he said it wasn't an arrangement he would feel comfortable admitting to friends and family.

"I ask myself would I want my little sister doing it and the answer's probably not."

Sandra Whyte, SNP MSP for Glasgow Kelvin and member of the Scottish Parliament's violence against women committee, said: "It's prostitution by the back door as far as I'm concerned and I would warn anyone against getting involved with it.

"It's sad to me that these are confident, educated women, basically selling themselves online."