Although they can theoretically choose to spend the cash on their own priorities, the further education funding council is determined the first call should be for colleges that still need to make themselves financially secure.

The council has given an undertaking to ministers and to the Scottish Parliament that the target will be achieved by 2006. It has earmarked pound;26 million for this purpose, money which was released last December and which the council says has already led to significant improvements.

But, in its latest circular announcing the additional cash, the council adds: “Some colleges still have work to do if they are to achieve financial security by July 31, 2006.” It tells principals: “If your plans do not already indicate that you will meet that target, your allocation from these additional resources should be applied to that purpose by making one-off investments to balance income and costs.”

The council says it will not release funds to individual colleges unless it is convinced they are on track to solvency.

The money must also be used to ensure colleges are able to comply with the new disability legislation by September 2005. This means that physically disabled students must not be put at a “substantial disadvantage” in trying to gain access to buildings.

The cash, which is a mix of unspent allocations for student support and other spending adjustments, is being distributed according to colleges’ normal spending share, ranging from an extra pound;562,500 for James Watt College to pound;800 for Newbattle Abbey College.

The council warns colleges to treat the funds as a one-off.