NHS Lothian’s associate medical director Simon Mackenzie said the rising number of cases over coming years will pose great challenges for the health board.
He said that while medics in Edinburgh were among the best in the UK, there was still more that could be done.
There are around 16,000 sufferers in the Lothians, but experts fear this could swell to more than 70,000 over the next 20 years because of rising levels of obesity and a record on alcohol that is showing little sign of improvement.
Dr Mackenzie said: “Diabetes accounts for between five and nine per cent of NHS spend.
“The key message is our performance is on a par with the rest of Scotland.
“But there is a clear need for improvement because it is a very serious issue.”