The issue is included in the final report of the Smith Commission, which has recommended which additional powers should be devolved from Westminster. However, no additional powers need to be devolved to allow the scheme to become a reality.

Instead, the five political parties in the Scottish Parliament have agreed that the UK and Holyrood governments should work together to ¡°explore the possibility of introducing formal schemes to allow international higher education students graduating from Scottish further and higher education institutions to remain in Scotland and contribute to economic activity for a defined period of time¡±, the report says.

The agreement responds to calls from higher education and business leaders, who warned that Scotland¡¯s economic growth was being hampered by skills shortages.

A joint letter sent to the Smith Commission earlier this month by representative organisations warned that the removal of the UK-wide post-study work route in 2012, combined with the hostility of the public debate around immigration, had resulted in a significant fall in the number of international students coming to Scotland.

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Signatories of the letter included Universities Scotland, the University and College Union Scotland and NUS Scotland, alongside business groups including the Scottish Chambers of Commerce and the Institute of Directors Scotland.

Speaking earlier this month, Pete Downes, the convenor of Universities Scotland, said a modified visa policy could deliver ¡°significant economic and social benefit¡± north of the border.

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¡°Scotland has distinct demographic challenges that adversely affect our potential for economic growth,¡± said Professor Downes, the principal of the University of Dundee.

¡°We face skills shortages in key sectors, as articulated by business, and our universities are forced to operate in an anti-competitive environment in attracting international talent that could be of great economic and social benefit to Scotland.¡±

There is a precedent for Scotland having distinct visa arrangements to the rest of the UK. Between 2005 and 2008, an initiative called Fresh Talent allowed students to stay in Scotland and seek work for two years after graduation.

The Smith Commission report also recommends that the Scottish Parliament should be given the power to set income tax rates and should retain all the income tax raised in Scotland. It also proposes that Holyrood should be given powers to allow 16 and 17-year-olds to vote in Scottish elections.

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Alastair Sim, the director of Universities Scotland, said there was a ¡°very strong¡± case for the introduction of a Scottish post-study work visa.

¡°We recognise that further devolution of powers are not necessary to deliver this as the Fresh Talent initiative was delivered under existing powers of the Scottish Parliament but the weight of the Smith Commission¡¯s support gives renewed impetus to the fact that Scotland should be enabled to set its own policy in this area,¡± said Mr Sim.

chris.havergal@tesglobal.com