A leaders’ meeting at the Convention of Scottish Local Authorities will confirm that an additional pound;7 million in this financial year, 2003-2004, will bail out support aspects of the pay and conditions deal. A further pound;3.5 million will be available the year after.

Highland and other rural authorities have repeatedly claimed that they have have been penalised because they employ disproportionately more teachers.

The authority recently enlisted the support of some 80 school boards to turn the screw on ministers and lobbied Cathy Jamieson, Education Minister, in Inverness prior to the election campaign.

Peter Peacock, Local Government Minister, is also a Highland Labour list MSP and has been under most pressure. Mr Peacock is a former convener of Highland Council.

Local authority leaders at their meeting in Edinburgh are set to confirm that the extra pound;7 million will form part of the pound;80 million post-McCrone injection announced last month by Ms Jamieson at Cosla’s annual conference.

In cash terms, Highland is the main beneficiary with almost pound;1.5 million coming its way. Next in line are two of the cities - Aberdeen and Dundee - with more than pound;800,000 apiece.

But Shetland with pound;750,000 is the biggest gainer in percentage terms.

Its teachers’ pay bill will rise by almost a third because of the different calculation. The Western Isles and Orkney are the other two largest percentage gainers.

Ministers and council bosses have now accepted the arguments around “supersparsity” and will consider a different formula in future funding allocations.

Council leaders will also confirm that the additional Scottish Executive cash to ease the problems with job-sizing will be distributed on the actual costs incurred by authorities. Some pound;31 million over three years will be available to cover the costs of teachers on conserved salaries who lose out in the shake-up of posts. Ministers will expect long-term savings.

Around pound;38 million over three years - with the bulk in 2005-2006 - will be available for restructuring in primaries and secondaries, with significantly more management posts in the primary sector.

In a letter to Cosla, Ms Jamieson insists: “I will expect to see a light touch plan from each authority as to how they propose to commit this funding.”

However, she expects councils to make savings running to pound;37 million by 2006 as a result of falling rolls. Some 40,000 fewer pupils will be in schools by then.

Ms Jamieson also stresses that, as the costs of job-sizing and restructuring reduce over time, the cash released is transferred to the chartered teacher programme being launched in August.

She further confirms that authorities will be able to be flexible in their deployment of support staff. The post-McCrone deal suggested around 3,500 new support staff would be employed to ease the workload burdens on teachers but authorities have been given licence to spend on their own priorities.

“The figure was not intended as an inalienable target of numbers employed,” Ms Jamieson states.