Mr Mackay, addressing a conference on higher education and a Scottish parliament organised by the STUC and the Association of University Teachers, said the battle would be mainly about the use of existing funds, rather than any increase in the total.

Pressure on the parliament and the executive was to “get more bangs for your bucks” and higher education had still to win the argument for more cash. The issue for policy-makers was the funding split between schools, colleges and universities.

Mr Mackay said there were 150,000 students but 800,000 pupils in schools. Higher education was already absorbing between 25-30 per cent of education funding.

He was backed by Peter Scott, vice-chancellor elect of Kingston University and former editor of the Times Higher Education Supplement. Tony Blair’s three priorities were primary, secondary and further education. Higher education had still to persuade ministers it was a funding priority, Professor Scott said.

Brian Wilson, the Education Minister, said a Scottish parliament was free to take any line on educational policy, including the controversial imposition of tuition fees on students, provided it could find the funds.

However, Mr Wilson offered the promise of a solution to Scottish students having to pay extra for their four-year Scottish honours course. Courses south of the border last three years.

He said: “The requirement for a Scottish student to pay more in fees for an equivalent qualification strikes the Scottish student, and the Scottish minister, as unfair.” The Garrick committee had recommended students should not be disadvantaged.

Scottish Office civil servants are currently holding talks with the Department for Education and Employment. Mr Wilson described the discussions as “vigorous and continuing”.