The restoration of free university education for Scottish students took a step closer last night when MSPs narrowly voted in favour of scrapping the graduate endowment.

The Scottish Government's Graduate Endowment (Abolition) Bill received the backing of 65 MSPs - the minimum needed to secure a parliamentary majority.

Labour and the Conservatives voted against the draft legislation, but it was passed with the support of the SNP, Liberal Democrats, Greens and the Independent, Margo Macdonald.

MSPs also backed a LibDem amendment placing a statutory duty on ministers to provide student support.

The bill will now return to the parliament's Education Committee for line-by-line scrutiny.

If it is eventually passed, it will mean Scottish students will no longer be liable for the £2289 fee when they graduate, although those from England will continue to pay fees of £1700 per year. By contrast, students in English universities have to pay top-up tuition fees of up to £3000 a year.

Education Secretary Fiona Hyslop said 50,000 students would immediately benefit once the charge is scrapped, helping to tackle student debt and widen access to university for those from low-income backgrounds.

She said: "We believe that debt, and the fear of debt, acts as a barrier that prevents some youngsters from entering university.

"The removal of the unfair and inefficient graduate endowment fee is an important first step in our plans and I'm delighted that parliament has approved it."

In an unusual move, a report by the Education Committee last week recommended the parliament vote to reject the general principles of the bill.

After the committee was evenly split, its convener, Labour MSP Karen Whitefield, voted against it.

Labour, who introduced the graduate endowment along with the LibDems when they were in power, point out the money raised is spent of bursaries for low-income students.

During a debate on the bill yesterday, Ms Whitefield said: "Scrapping the graduate endowment will cost the government an estimated £17m a year.

"But surely that is £17m that would have been better invested in measures to widen access and extend the support available to the poorest students through the current bursary system."

Murdo Fraser, the Tories' higher education spokesman, said the bill did nothing to tackle the "unprecedented threat" facing Scottish universities due to the growing funding gap with their English counterparts.

While English universities receive all the money raised through top-up fees, those in Scotland must rely on direct funding from the government.

Mr Fraser said: "Rather than spend money on supporting our universities, the SNP are proposing to cut £17m per year from the education budget and to use that to abolish the graduate endowment.

"That is a proposal which the Scottish Conservatives cannot support."

James Alexander, the president of the National Union of Students in Scotland, said: "Scrapping the graduate endowment is a good start, but much more needs to be done to make access to education in Scotland truly equal."

The endowment The graduate endowment was introduced by the previous Labour/LibDem coalition at the start of the 2001-02 academic year as a replacement for tuition fees. It is a one-off charge of £2289, but graduates do not have to start paying it until they are earning £15,000. Scottish and EU students are liable for the charge, but English students still have to pay tuition fees of around £1700 a year. Students can pay the fee in cash, add it to their loan or use a mixture of both. Around 70% of graduates have been adding fees to loans each year. The money raised through the charge is ringfenced and spent on bursaries for students from low-income backgrounds. Both the LibDems and the SNP promised to scrap the graduate endowment in their pre-election manifestos. If the bill is passed, students who graduate from this year onwards will no longer have to pay the endowment.