Last week, it emerged that students from Northern Ireland could avoid fees by taking dual Republic of Ireland citizenship and applying as EU students, which would result in them having their fees paid under European equality law.
The Scottish Government played down the development, saying it would only apply to a small number of students.
But it has now emerged that anyone who lives in the UK who has an Irish grandparent can obtain an Irish passport and apply under the same loophole.
Nearly 625,000 people living in England and Wales claimed Irish ethnicity in the 2001 census – and as many as six million across the UK are estimated to have at least one Irish grandparent.
In some cases, even UK residents with an Irish great-grandparent could apply for an Irish passport.
The children and grandchildren of people of other EU nationalities living in England and Wales could also use the same loophole.
Under new legislation, students from England, Wales and Northern Ireland should pay fees of up to £9,000 a year to attend Scots universities, while Scots students study for free.
But the loophole raises the prospect of a flood of applicants from around the UK.
The development may mean greater competition for university places in Scotland.
'Grannygate' row as legal loophole is set to allow English students with Irish heritage to go to Scottish universities for free | Mail Online: