Billy Robson from Kelso and several other party-goers were rushed to hospital last Monday night.
The 16-year-old died just a short time later in Borders General Hospital.
A source at the party has described how legal high Benzo Fury was taken in the hours leading up to the agricultural student's death.
He said: "The drug responsible is Benzo Fury. You can buy it on the internet and we all thought it was safe enough.
"It's easier to get than drink or anything else if you want to get wasted. Everyone should know what this can do. It can kill you."
Police confirmed this week - ahead of toxicology findings being made available - that they are aware of the legal high allegations. A spokesman added: "We are still investigating the death of a 16-year-old man."
The other teenagers who were taken to hospital last Monday were released following treatment.
Tributes have been paid to Mr Robson, who was a keen rugby player, on social media sites all week. His father, Stuart, commented: "Billy was a bright, fun, outgoing lad. He had his whole life ahead of him. Everybody's devastated."
Last year the Border Telegraph revealed how five teenagers from Selkirk were left in coma after taking similar substances, called Plant Food, at a party.
A spokeswoman at the time for the Alcohol & Drug Partnership, told us: "Just because these drugs are legal or claim to be legal, does not mean they are safe to take. There is no way of knowing what is in them."
Benzi Fury, which is the substance being blamed for last week's tragedy in Newtown St Boswells, was also believed to be behind the death of 19-year-old Alex Heriot at Rockness earlier this year.