Total funding will increase from ?959.4 million this year to ?1.017 billion in 2012-13, with the main teaching grant rising by just over 10 per cent, it was announced today.

The increase compensates for an equivalent drop in funding this year.

A total of 1,000 new places have been announced at the University of the Highlands and Islands, as well as 300 extra places for science, technology, engineering and mathematics subjects.

Robin Parker, president of NUS Scotland, said that the funds were sufficient ¡°to put the issue of tuition fees for Scottish students to bed, once and for all¡±.

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¡°These indicative funding allocations deliver on the overwhelming consensus which exists in Scotland that, despite reforms in England, higher education in Scotland should continue to be funded from the public purse,¡± he said.

Mr Parker added that increased public funding meant Scottish universities should now be more democratically accountable and introduce elected chairs for university courts.

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Universities Scotland said that the grant letter ¡°confirms that cuts to universities¡¯ teaching grant, as seen in last year¡¯s Budget, have been restored in full and that significant new investments are planned in research, in science and in opportunities for learners in Scotland¡¯s more remote communities.¡±

It also said that money for research rated 2* (internationally recognised) in the last research assessment exercise had been discontinued and concentrated more heavily into work rated as 3* (internationally excellent) and 4* (world leading).

Teaching funding for 2010-11 fell by just over 10 per cent, but in the Scottish government spending review in September the government committed to a steady increase in university funding to 2014-15.

david.matthews@tsleducation.com