The unexpected announcement will provide pound;4 million for early intervention projects on top of pound;9 million already allocated for the next three years. That means pound;7 million will be available for the next school session, one of the first concrete examples of Labour’s pre-election commitment to “trawl every nook and cranny” of Scottish Office spending to rebalance the books.

Brian Wilson, the Education Minister, said: “The extra cash will go to support the widest possible range of projects, including extra help in the classroom so that teachers can focus on the basic skills; staff development and training to ensure best practice; encouraging liaison between the home and school; and providing attractive and effective teaching materials.”

Donald Dewar, the Secretary of State, said pound;17 million had been found for education, health and housing by “good housekeeping”. He agreed the sums were “necessarily modest” this year because much of the Scottish Office’s pound;14 billion budget was already committed. Mr Dewar said later that this was “but the prelude to a major review of spending within Scotland and the rest of the United Kingdom”.

The Scottish Office is to co-operate with parallel Whitehall audits, particularly in fulfilling the “new deal” pledge to help 25,000 under-25s in Scotland off the dole and into work, education or training. “But we will not be averse to taking an independent line,” the Scottish Secretary said.

Mr Wilson also signalled his particular interest in special educational needs by announcing that pound;500,000 of the pound;4 million would be earmarked for projects in this field. He described that initiative as “a matter of both symbol and substance”. Each council will still be limited to a pound;300,000 grant but the additional cash will allow 23 to benefit from August instead of 10.

The Scottish Office aims to announce the successful bidders by June 14.

Labour’s other key pledge, to reduce class sizes in the early years of primary school, will have to wait a year until cash is released from phasing out assisted places. Mr Wilson “bitterly regretted” the delay but said primary classrooms could look forward to the progressive redirection of pound;14 million over the next seven years.

It was the modesty of the Government’s efforts rather than its intentions which exercised the Liberal Democrats, who dismissed the funding switch as “a slight shuffle in the right direction, not even a step”. Donald Gorrie, the party’s education spokesman, said: “Four million pounds for education is, frankly, piffling when you consider that, by adding a penny to the basic rate of income tax, Scottish education could have 50 times that amount every year.”

But the Educational Institute of Scotland said that every penny restored to the education system was welcome.