The school, based in Savannah, Georgia, plans to offer 14 degree programmes in digital arts at the new campus being developed at its own expense in the former North Kowloon Magistracy in Sham Shui Po.

SCAD was awarded the historic building last year at a nominal rent in a government revitalisation scheme, beating a bid by the Chinese Artists Association to use it for Cantonese opera - a decision which drew protests from the arts community.

John Rowan, a vice-president at SCAD Hong Kong, said it had received applications from as far afield as Chile, and there had been 'very strong interest' in Hong Kong.

He declined to reveal the number of applications or the breakdown of admissions by country and region until the process was complete. 'We are not subject to any limit or quota on the number of non-local students,' he said. 'We want the top students from anywhere in the world. I would love to see a number of top Hong Kong students come to SCAD.'

Victor Lai Ming-hoi, an associate head of the cultural and creative arts department at the Hong Kong Institute of Education, said SCAD's fees were more than twice the typical level for degree programmes.

'It is quite expensive and, if it is their policy not to reserve any places for local students, I think that is unacceptable as they have free use of a public building,' he said.

Connie Lam, an executive director of the Hong Kong Arts Centre, which runs a fine arts school with 200 full-time students, said there was a lot of unmet demand for art degrees and society should welcome new schools.

Rowan said the charitable foundation that runs the Hong Kong branch is required to keep any surplus income it generates within the city and reinvest the money in improving and expanding the school.

'Once we reach full capacity in about three years, we will be looking for another site to expand the university further,' he said. 'And we would like to collaborate with other universities in Hong Kong to develop shared courses both within visual art and other programmes, such as humanities, business and even science.'

Ginger Hansen, the director of recruitment and admissions, said all applicants were considered for scholarships based on academic merit and artistic ability. The school also provides 80 private endowment scholarships.

'At SCAD, about 50 per cent of incoming students receive academic, artistic or combined honours scholarships each year,' she said. 'These range from US$1,500 to full tuition per year. But there are no needs-based scholarships and we do not restrict scholarships to any one campus, so there is no SCAD Hong Kong internal scholarship fund.'

Students in Hong Kong will be eligible for the government's non-means tested loans scheme and travel subsidy scheme, she said.

More than 9,500 students attend SCAD's two US campuses and study centre in France.