Edinburgh University has been accused of 'anti-English' bias after discriminating against applicants from the South.
Admissions rules posted on its website state that 'additional weighting' will be given to students from Scotland and the far north of England.
The move aims to ensure 'local' applicants get on popular courses.
But headteachers at leading English public schools condemned the policy as 'potentially illegal and racist' and unfair to English families whose taxes support Scotland.
The move triggered suspicions that the university - whose past students include Prime Minister Gordon Brown - is trying to change the social make-up of its campus.
It has traditionally been a magnet for students from aristocratic and society circles, attracting the reputation of being 'English and posh'.
One of the unhappy English headteachers is Richard Cairns, of Brighton College. He said only two out of 27 applicants to Edinburgh had so far been successful this year
Mr Cairns, who used to teach in Scotland, said: 'I asked around schools in the South East. They have all had the same experience. Edinburgh has opted to turn in on itself in a manner that strikes me as potentially illegal and racist.'
The university - among the top 20 in the world and a member of the Russell Group of leading UK colleges - is understood to be the only UK institution to give priority to applicants from certain areas.
Its website stated: 'We want to make sure that local applicants are not prevented from studying their chosen subject.' It added 'additional weighting' will go to students who live in Scotland, Cumbria, Northumberland, Durham, Teesside, and Tyne and Wear.
Andrew Halls, head of King's College School, Wimbledon, South London, said he had been 'quite struck' by the lack of offers from the university this year.
'Edinburgh has been ruthless and, at worst, is adopting a depressingly xenophobic approach.
'They are losing a lot of very able candidates who would love to study in Scotland.'
A spokesman for the university said: 'The percentage of English entrants has risen year-on-year over the past few years.
'In 2009, 41 per cent of UK entrants were from England
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