The association, which represents principals and board chairs, welcomed the new money for extra places, the new investment in IT and infrastructure, and the extra sums for bursaries.

But it warned that, while the pressures on staffing and costs would ease for the sector as a whole,individual colleges will still face funding problems. The distribution of the money was “more severely skewed than expected”, with increases in grant ranging from as little as 1.5 per cent to more than 17 per cent.

Joyce Johnston, chair of the FE principals’ forum and principal of Fife College, said the settlement was good news. “The Government has delivered what it promised and we now look forward to delivering in return.”

The College Lecturers’ Association also gave the announcement a general welcome. “It’s so wonderful to get a funding announcement that doesn’t have a negative impact on the colleges,” Marian Healy, the union’s further and higher education officer, said. “That should ease the pressures on the jobs of our members.”

Ms Healy was more cautious in welcoming the extra 8,000 student places. She hoped this would not be at the expense of class sizes and that lecturers, materials and accommodation would be in place first.

On the increased quality fund, Ms Healy commented: “Hopefully this will lead to better quality management and better quality governance in the colleges.”

Donald Leitch, principal of Glasgow College of Food Technology, said it was too early to comment. The college has the second lowest increase among the incorporated colleges, pound;130,000 above this year’s grant.

The position was made worse by the Scottish Office decision to claw back money from a number of colleges for getting their sums wrong on student figures, Mr Leitch said. As a result his college will lose pound;190,000 which has to come out of this year’s budget.

A discordant note was struck by Mike Webster, principal of Perth College. He welcomed the additional money for student bursaries and for information technology. But, although the college’s grant will rise by pound;440,000, Mr Webster said he was “very disappointed”.

He added: “Despite having increased our teaching activity by over six per cent last year, our basic grant allocation gives us an increase on last year of only 1.4 per cent - less than inflation.”