Howard McKenzie, acting chief executive of the Association of Scotland’s Colleges, says the pound;53.4 million for FE over three years, up from pound;52.6 million,“goes a long way to delivering our strategic aims”. He welcomed the planned capital investment, which will increase from pound;87.9 million to pound;97.5 million by 2010-11.

But Sir Muir Russell, convener of Universities Scotland, reacted with disappointment to a “missed opportunity”, which would give the HE sector an increase of pound;30 million in real terms by the end of the three years, not the pound;168 million it had asked for.

The universities are concerned that the access by their counterparts in England to income from increased tuition fees will put them at a disadvantage. The other parties at Holyrood are seeking to exploit this by opposing the SNP’s budget unless it agrees to a better settlement for the universities.

The Scottish Government is pointing out, however, that the universities’ bid over three years was for an extra pound;526 million, not pound;168 million. It also says any extra tuition fee income for universities in England will not kick in until the 2011-12 session and any review would be for the next spending period.

Ministers are also casting doubt on whether their colleagues in England will be able to invest an extra 2 per cent in universities, as claimed.

An analysis of the Government’s spending plans by accountants Ernst and Young and the Centre for Public Policy for Regions estimates that the total available to the Scottish Funding Council, which disburses money to colleges and universities will rise in real terms by just 0.5 per cent a year until 2010-11.