AN EU-wide system of countries reimbursing each other for university students studying across the continent is the best way forward to tackle fees and funding issues, two independent economists have warned.

Former civil servants Margaret and Jim Cuthbert made the claim after they looked at the way the existing system works across Europe and Scandinavia.

They said in a report they gave to a politics website: "Scotland should work with other EU countries to lobby for the adoption of an EU-wide reimbursement system that would see administrations paying for the cost of educating their own students, no matter where they study within the European Union.

"This would be a simple financial solution and should be neutral therefore in a student's decision as to where to study. The Nordic countries, Austria and the Netherlands are already in favour of this kind of arrangement."

While the number of European students coming to Scotland has risen as numbers going to England have fallen in recent years, Scotland has few levers to deal with this under existing powers.

The Cuthberts argue that Scotland "would not be out on a limb" by charging moderate tuition fees, which could be offset by an Irish-style administration fee refundable to Scots students through a grant.

They have produced figures to show that of 19 nations or regions in Europe 11 have no tuition fees, while England has the highest by "a considerable margin."

Some charge little for fees, except in Ireland where costly administrative fees were included.

The Cuthberts say Scotland is "doubly disadvantaged" as England has taken a unilateral decision which "grossly disadvantages us," and at the same time Scotland does not have the range of powers to respond which are available to other countries.

They say: "This anomalous constitutional position needs to be sorted out. This is no equal partnership of nations in the UK union."