BORIS Johnson’s department was accused of putting nationality above expertise yesterday, after foreign experts from the London School of Economics claimed they had been kicked off a Government Brexit project in favour of British-born academics.

Foreign Office officials denied the charge, saying there had simply been a misunderstanding.

The row came as Universities Scotland said they would oppose Tory plans to “name and shame” foreign academics working in the country’s 19 higher education institutions.

Late on Thursday night, Sara Hagemann, an assistant professor at the London School of Economics who specialises in EU policy-making processes and EU treaty matters, and who originally comes from Denmark, was told the Government no longer wanted her work.

Dr Hagemann tweeted on Thursday night: “UK govt previously sought work & advice from best experts. Just told I & many colleagues no longer qualify as not UK citizens”.

The academic later clarified she had been told that she would not be contributing to any further Government Brexit work.

It is understood up to nine LSE academics specialising in EU affairs have been briefing the Foreign Office on Brexit issues.

This has come to an end, after the Foreign Office said they were worried non-Britons might leak sensitive material ahead of Article 50 negotiations.

In a statement, LSE said they would stand by their academics. They said: “We believe our academics, including non-UK nationals, have hugely valuable expertise, which will be vital in this time of uncertainty around the UK’s relationship with Europe and the rest of the world.”

The Foreign Office denied that normal working practice had changed as a result of the referendum.

“It has always been the case that anyone working in the FCO may require security clearance depending on the nature and duration of their work. Britain is an outward-looking nation and we will continue to take advice from the best and brightest minds, regardless of nationality,” a spokesman said.

The issue arises as many EU nationals living and working in Britain are worried that the Government has yet to guarantee their status despite that during the Tory party conference Liam Fox said they were one of the UK’s “main cards” in Brexit negotiations.

But it was Amber Rudd’s proposal to make firms and institutions declare how many non-British staff they employed that overshadowed the conference.

Yesterday, Universities Scotland made clear they would be opposed to what Green Party MSP Ross Greer called a “racist register”.

A spokeswoman for the body said: “Scotland’s 19 higher education institutions are incredibly proud to employ thousands of staff from the EU and from across the world. They are a big part of what makes Scottish HE so successful and their contribution is greatly valued. It is really important that we take every opportunity to keep repeating this. We would oppose any proposal to identify our EU and international staff as anything other than an asset to Scotland.”

Meanwhile, French President François Hollande has told Britain it will be punished for leaving the European Union.

“There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well and, inevitably, will have economic and human consequences,” the French president said.

“Britain has decided on a Brexit, I believe even a hard Brexit. Well, we must go all the way with Britain’s will to leave the European Union,” he told a dinner in Paris attended by the EU Commission President, Jean-Claude Juncker, and the EU’s top Brexit negotiator, Michel Barnier.

Hollande’s comments helped cause instability in the markets, with sterling tanking six per cent against the dollar to $1.1841. It also fell to €1.10 for the first time since 2010. Some currency exchanges were effectively swapping one pound for one euro. Although it recovered slightly, the markets are still volatile.

Chancellor Philip Hammond told the BBC that the fall was partly “driven by technical factors” and seemed to have been caused by an automatic computer programme responding to Hollande’s comments being reported.

“Markets will go up and down – markets respond to noises,” Hammond said.

“We are going to go through a period of volatility, there will be lots of commentary going on and we can expect to see markets being more turbulent over this period and we should prepare for that.

“The important thing is to look through the movements of currency markets and short term movements of sentiment.... we go into this period of turbulence fundamentally strong.”