Preheat oven to 350 degrees F. In microwave or top of a double boiler, melt butterscotch morsels and butter. If using microwave, coat morsels with softened butter and microwave at 70% power for a minute. Stir. Repeat until melted. Stir in crumbs and nuts. Press a little over half of the crumb mixture into bottom of pan.
Prepare topping. Beat together cheese, condensed milk and vanilla. Add egg and stir until well mixed. Pour cheese mixture over base. Sprinkle reserved crumb mixture over top and bake for 25-28 minutes. Let cool completely. Chill, then cut into bars.