Dundee University has defended receiving more than £800,000 from the Libyan government over the last three years.
The money paid for dozens of students to embark on a variety of courses, from dentistry to environmental modelling.
The university insisted its relationship was with individual students rather than with the regime in Tripoli.
An uprising against Libyan leader Colonel Gaddafi has been under way for months, supported by the UK and other western nations.
However, prior to the rebellion the UK Government had been fostering links with Tripoli and encouraging companies to do business there.
The British Council, a cultural organisation, had also been assisting Libyans wishing to study here, although its operations in the country are now suspended.
An inquiry under freedom of information laws found Dundee University had accepted 35 Libyan students between 2008-09 and 2010-11.
State sponsorship for students going abroad is common practice in many countries.
In Dundee University’s case, it received just over £800,000 from the Libyan government or its embassy.
Strathclyde University received around £1.7m over the same period.
Tory MP Robert Halfon has called for an inquiry into academic involvement in Libya, and Scottish Liberal Democrat education spokesman Liam McArthur said both universities should take “urgent steps” to assure the public.
A Dundee University spokesman said, “This is funding which has supported students coming here to study a variety of postgraduate and professional programmes, including dentistry and at the centre for energy, petroleum and mineral law and policy.
“Libyan students, as with those from other countries over this period, were entitled to come and study in Scotland provided they met the key criteria of being academically qualified for the course, having the necessary funding to support their studies and that they been had granted an educational visa by the UK Government to come and study in this country.
“It is the UK Border Agency who ultimately decide if students should be allowed to come to the UK by issuing them a visa.
“We have students from over 100 countries at Dundee, all subject to the same criteria.”
The spokesman said it was too soon to say if any more Libyan students would be arriving next term.
“Whether the visa application process is affected by the current diplomatic situation between the UK and Libya would be for the government to decide,” he said.