Edinburgh and West Lothian are the latest to pull out. East Lothian and Angus had already gone, leaving East Renfrewshire to soldier on.
The new deal was supposed to replace the ring-fenced excellence fund - which, in Edinburgh's case, paid out money in 13 separate funding streams - with local agreements. The councils' side of the bargain was that they had to show they were boosting attainment and directing the money towards the five national priorities.
Edinburgh had planned to focus on boys' attainment, increase the number of pupils taking exams in the sciences and give additional support to bilingual pupils. It had expected just over pound;11 million to disburse to schools for 2002-03 but was told in early April that it would receive pound;240,000 less. It had also anticipated support from an innovation fund and had bid for pound;1 million over the two years of the pilot, but received nothing.
The council was also angered by a sudden reduction in the piloting period from two years to a year and a requirement to produce a report on the "outcomes" achieved twice within the year.
A spokesman for the Executive said there had been no commitment to establish an innovation fund, although Edinburgh had raised the possibility. The flexibility that is intended to flow from the outcome agreements was in the use of existing funds.