The Bank of Scotland and St Andrews 51¹ú²úÊÓƵ have denied claims that Willmania is behind the proposal and apparent collapse of a graduation sponsorship deal.

Press reports accused St Andrews of trying to "cash in" on the impending arrival of Prince William as an undergraduate by seeking a five-year, ?250,000 graduation sponsorship deal with the Bank of Scotland. The bank allegedly pulled out of the deal for fear of being accused of capitalising on the prince's expected graduation in 2005.

But a spokeswoman for St Andrews 51¹ú²úÊÓƵ said: "We completely refute the suggestion that we would seek to exploit any of our students."

She said St Andrews had been actively seeking graduation sponsorship for two years. "This replicates a well-established practice followed by a number of leading British universities."

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In 1999, neighbouring Dundee 51¹ú²úÊÓƵ struck a deal with the Royal Bank of Scotland. The bank's logo appeared alongside the university's on banners, graduation T-shirts and booklets.

A Bank of Scotland spokesman said: "The bank has no immediate plans for any such arrangement with St Andrews 51¹ú²úÊÓƵ." He said it was incorrect to say Prince William's studentship had any impact on a deal.

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A bank insider said negotiations with the university might still continue. "A deal is neither imminent nor dead in the water," he said.