Scottish universities face being fined or having to slash numbers if they recruit too many students under a Government initiative to boost the economy, reports The Herald newspaper. The position has arisen after a Scottish Government decision to restrict numbers for the coming academic year in science, technology, engineering and mathematics - the so-called Stem subjects - because of pressure on budgets.

Since 2007-08, the Scottish Government has allowed universities to recruit as many students as they like in these subjects because it was seen as good for the economy.

However, the students come at a cost because their fees are paid by the Government-backed Student Awards Agency for Scotland.

As a result of the "considerable uncertainty" surrounding future financial settlements, Michael Russell, the Education Secretary, introduced a new cap on the intakes.

However, the cap - enforced through financial penalties - will lead to a rapid reduction in the number of Stem students at a time when many see them as vital to Scotland's future economic success.

The worst hit institution is Heriot-Watt University, in Edinburgh, which is already 11% over the new limit.

Under Scottish Funding Council rules, the university will now face financial penalties, likely to run into thousands of pounds, with a spokeswoman stating: "To comply with the new cap, our undergraduate population will have to be reduced."

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