American colleges and universities are unclear about their authority to give black-only scholarships following the Supreme Court's decision last week not to review a case involving the University of Maryland.

The Supreme Court decision means that a lower court ruling that Maryland's Benjamin Banneker scholarships are unlawful is now permanent. More than one-half of American higher education institutions are believed to have affirmative action programmes in which scholarships are reserved exclusively for black students. That is the way they have increased the numbers of black students. The programmes were designed to redress years of discrimination, but conservatives say it is wrong to give scholarships on grounds of race.

The University of Maryland called the decision "tragic". But Michael L. Williams, former assistant secretary for civil rights in the Bush administration who caused a national furore in 1991 when he said scholarships reserved for racial groups were discriminatory, said: "I feel quite vindicated."

Last week's decision was the latest round in the long-running debate about affirmative action in higher education. Technically it applies only to public universities in the five states in the fourth circuit: Maryland, North Carolina, Virginia and West Virginia. But lawyers believe it also would affect private universities in those states, and probably others elsewhere.

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The University of Maryland gave 40 blacks-only scholarships under the Benjamin Banneker programme, named after a 19th century black mathematician who helped design the street plan for Washington. When the lower court struck down the programme, the university decided to treat race as one criterion for financial aid and not to limit scholarships to blacks only. The scholarships were extremely sought after because they covered the whole of a student's tuition and maintenance at the University of Maryland. The lower court criticised them for not being tailored to the aim of increasing black representation from Maryland and for not taking into account financial need. Black students get scholarships to attend the university from all over the US, and their parents are not always poor.

"I don't think any colleges within the five states could continue to operate their programmes in good faith," said Richard Samp, chief counsel of the conservative Washington Legal Foundation, which acted for a Hispanic student who filed the lawsuit against the University of Maryland.

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Theodore M. Shaw, associate director of the legal defence and educaton fund at the National Association for the Advancement of Coloured People, said: "We're deeply disappointed that the court decided not to review."

The Supreme Court decision made no comment about the merits of the case. Critics of the Banneker programme have, however, pointed out that students awarded the scholarships have said they would have gone to Ivy League universities, such as Princeton and Cornell, if they had not got a full scholarship to Maryland.

Thus, the scholarships benefited the institutions rather than the students, critics have said. They enabled institutions like Maryland to recruit scarce black students rather than enabling students to go to the best places.