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The body representing Scotland's university principals has said students may have to pay towards the cost of their degrees after they graduate.

Universities Scotland said higher education should be "free at the point of entry and throughout their study".

But graduates earning reasonable salaries should be asked to pay.

The principals are worried that Scottish universities are beginning to fall behind the standards of their counterparts in England.

A recent review of university funding in England, conducted by former BP boss Lord Browne, recommended that the cap on tuition fees, currently set at £3,290, could be removed altogether.

Graduates in England currently start paying their tuition fee loans when they earn £15,000.

Scottish students studying in Scotland currently do not have to pay tuition fees.

Alastair Sim, director of Universities Scotland, told an education conference in Edinburgh that they should not pay until they had graduated.

He said: "A contribution sought from graduates must be set at a level that does not discourage participation and students from all backgrounds must be able to study any course at any institution.

"Academic potential, and not the ability to pay, must be the determining factor."

Universities Scotland is also calling for the establishment of an expert group to model and cost a "workable" graduate contribution immediately after the publication of the Green Paper on university funding later this year.

'Unsustainable'

Earlier this month, Sir Andrew Cubie - who chaired a landmark inquiry into student funding a decade ago - said Scotland's system of university funding was unsustainable without some contribution from graduates.

In Scotland, tuition fees were abolished in 2000, two years after their introduction by the Blair government.

A one-off graduate endowment fee of about £2,000 was scrapped by Scottish ministers in 2008.

In his speech in Edinburgh, Mr Sim warned against short-term budget cuts.

He argued: "If we see major cuts in university funding in this year's budget bill, there will be effects which damage Scotland economically and socially.

"Many of these cuts are not quickly reversible and there is no credible way in which income from other sources can fill the gap next year."

He also said that cuts in line with the government's independent budget review would mean fewer Scots being able to access university education, a reduced choice of courses and "substantial" job losses.

'Scottish solution'

First Minister Alex Salmond told MSPs a "distinctive Scottish" solution was needed to university funding.

He said the Scottish government would set out the fresh options for funding before the end of the year but informed MSPs that a return to tuition fees had been ruled out.

"No decision will be made until all those who have an interest, including students, the universities and staff, have offered their views," he said during first minister's questions.

A cross-party summit, which will include student and university representatives, is to be held on the issue on 15 November.

Mr Salmond added: "The Scottish government will publish a green paper by the end of the year laying out the options available to us with a view to reaching a solution by the second half of 2011."

But Tory leader Annabel Goldie responded by telling MSPs: "Listening to the first minister, he's like some latter-day Nero strumming out 'Gaudeamus igitur' on his fiddle while tongues of flame reach out to our universities.

"When our own universities conclude that graduates are going to have to contribute to the cost of their education - when the NUS accepts that - why can't the first minister accept that simple principle, so that we can all get on with working out the detail?"

The Scottish Labour Party said Universities Scotland's position was "a further hammer blow to the SNP's unsustainable approach".

Labour's further and higher education spokeswoman, Claire Baker, said: "Students and principals realise that we can't go on as we are and something needs to be done sooner rather than later.

"People want urgent action from this government on this issue and it has been severely lacking."

Her party has called for an independent review to resolve the "crisis".