Image copyright Science Photo Library Image caption Research students could receive loans of up to £25,000 under a review of postgraduate funding

Chancellor George Osborne's Budget has promised loans up to £25,000 for UK students studying for PhDs and research-based master's degrees.

"Future economic success depends on future scientific success," he said.

The government says the country needs to train more highly skilled people to stay competitive with other countries.

Labour leader Ed Miliband said cutting tuition fees to £6,000 would be a better way to "reduce the burden of debt".

The chancellor's proposal of loans up to £25,000 to cover the duration of a postgraduate student's studies is to be put out to consultation as part of a review of financial support for postgraduate research.

Loans of £10,000 for students on taught postgraduate courses were signalled in the Autumn Statement in December.

These postgraduate loans would be paid back when students were working, like undergraduate loans.

Skills gap

The extension of loans to postgraduate students is a reflection of the growing demand for advanced researchers. Innovation and hi-tech skills are seen as vital to driving economic growth and creating jobs.

The government quotes figures from UK Commission for Employment and Skills estimating that by 2022 one in seven jobs will require postgraduate qualifications.

Image copyright Reuters Image caption Chancellor George Osborne steps out with his Budget box in Downing Street

But the UK's number of postgraduate students has lagged behind international competitors, with a much slower expansion in postgraduate students compared with the United States or Australia.

There have been warnings from universities that a lack of a postgraduate loans system has become a major barrier to students considering further research, particularly when they have already accumulated undergraduate debts.

Labour leader Ed Miliband argued that his party's plan to cut undergraduate tuition fees from £9,000 to £6,000 was the way to help young people through their studies.

Rather than supporting young people's ambitions, Mr Miliband said "the next generation has seen wages plummet and tuition fees treble".

Sir Peter Lampl, chairman of the Sutton Trust education charity, welcomed support for postgraduate study, which he said had "become the preserve of better off students".

"It will be important that the impact of the loans is fully monitored, particularly the effect of cumulative undergraduate and postgraduate debt, to ensure that these loans are being taken up by those who would otherwise lose out," he said.

Universities Minister Greg Clark said: "Postgraduate research students play a vital role in the UK's world-class research base.

"We are seeking to add to and strengthen our support for postgraduate research to ensure that UK employers have the skilled workforce we need to secure long-term economic growth."