The Scottish Government said measures would be put in place from next year to prevent prospective students from England, Northern Ireland and Wales seeking to avoid fees of up to £9,000 a year by claiming to be EU citizens.
The issue was first raised earlier this year when it emerged hundreds of students from Northern Ireland were attempting to avoid fees by applying to Scottish universities as Irish, rather than UK nationals.
But despite universities, including Dundee and Glasgow Caledonian, claiming they had seen a big rise in the number of Northern Irish students applying as EU nationals, figures from the Universities and Colleges Admissions Services (Ucas) released last month showed a 19 per cent fall in the number of those from Northern Ireland being accepted to Scottish universities.
There was a 6 per cent fall in the number of students from Ireland being accepted.
Under the new system, students from the rest of the UK will pay to study in Scotland, while Scots and those from elsewhere in the EU will remain exempt.
The Scottish Government said anyone applying to study in Scotland next year would be required to show evidence of having lived in another EU member state for a period of at least three months before qualifying to have their tuition fees paid. Guidance has already been issued to universities to assist with assessing dual nationality applicants for 2012-13, the government said.
Education secretary Mike Russell said: “Since the very recent changes to the tuition fees system, there is little or no evidence of changes in the make-up of applicants. However, speculation over the opportunity for prospective students, resident in the rest of the UK, seeking another EU nationality to avoid paying, has caused confusion.
“This legislation will require dual-national students to provide evidence that they have previously exercised their right of residence elsewhere and will prevent the use of dual nationality solely to benefit from free tuition. We have issued guidance to universities that will ensure a consistent approach across Scotland and provide clarity for students.”
In accordance with EU rules, students from other member states must be treated in the same way as Scots, meaning they are entitled to free tuition.
However, while there are no limits on the number of English, Northern Irish and Welsh students that universities can accept, the number of Scottish and EU students is capped.
Figures released yesterday by Ucas showed Scottish universities have recorded a 2 per cent increase in the number of students being accepted this year, compared to a 14 per cent fall for English institutions.
Commenting on the Scottish Government’s attempt to close the loophole, Tory education spokeswoman Liz Smith MSP said: “For 18 months, the Scottish Government has had its head in the sand over the dual-nationality issue. This announcement is long overdue.”
But Robin Parker, president of the National Union of Students in Scotland, said: “We welcome clarification on dual nationality. This will provide the guidance necessary for students from outside Scotland to make an informed choice when applying.”