By Steve Bargeton, political editor

FIRST MINISTER Jack McConnell yesterday launched the latest phase of a scheme to boost Scotland’s flagging population.

Under the Fresh Talent initiative, overseas students studying at Scottish universities are being offered a two-year visa extension to stay in Scotland after they finish their courses.

Yesterday, Mr McConnell announced that this would also be extended to foreign students taking Higher National Diploma (HND) courses.

Universities and colleges are also to get Executive funding to mentor and support overseas students to help them settle in Scotland.

The Fresh Talent initiative, launched last February, aims to reverse the decline in the nation’s population—projected to fall below five million by 2009—by attracting more students and skilled workers to settle in Scotland.

The policy aims to attract 8000 new people to Scotland each year between 2004 and 2009.

A relocation advisory service set up in Glasgow in October has received around 940 inquiries from potential immigrants from 80 countries.

“Tackling our declining population is a priority for the Scottish government, which is why I want Scotland to be the most welcoming country in the world,” said Mr McConnell yesterday.

“Scots are renowned for being friendly, welcoming people and the measures I have outlined today are a practical addition to that famous Scottish welcome.

“Scotland has a great quality of life, a fantastic environment, a first-class education system and a growing economy.

“I believe that we can attract people from the rest of the UK, from Europe and from further afield to come and make a contribution to our increasingly successful country.”

However, yesterday a leading labour economist warned that extending the student visa policy would not provide a solution to Scotland’s problems.

Professor Robert Wright, of Stirling University, said the Scottish Parliament would eventually need the powers over immigration that are currently reserved to Westminster to reverse the country’s depopulation.

He warned that Scotland’s key working age group of 20-64, representing about 95% of the labour force, was set to “shrink dramatically.”

“The likely number of people this policy will bring in falls well short of what is required,” he said. “And the people required are from right across the whole social spectrum.”

Last night SNP deputy leader Nicola Sturgeon accused Mr McConnell of “tinkering” with the problem.

“Today’s announcement only underlines Jack McConnell’s lack of ambition for Scotland,” she said.

“Rather than demanding full control of immigration policy, today’s statement amounts to no more than a tinkering around the edges of Scotland’s demographic time bomb.”

Meanwhile, the University of Abertay Dundee yesterday welcomed the next stage of the Fresh Talent initiative.

Vice-principal Professor Mike Swanston said, “Students make up a higher proportion of Dundee’s population than anywhere else in Scotland, but at the same time the city is facing the threat of a particularly acute population decline.

“Abertay has played and continues to play a key role in tackling this challenge, and this year we can point to another increase in overseas students enrolling on our courses here in Dundee, up by 20% on last year.

“Students and the income and economic impetus they bring are already vital to Dundee and will become increasingly vital to Scotland as a whole.

“The First Minister’s Fresh Talent initiative should be welcomed as a very valuable strategic steer to tackle the issue of population decline, but of course it requires energy and effort from local communities and from institutions to achieve the goals the Scottish Executive has set.”