A total triumph and an utter defeat

The First Minister started the final, crucial day of Budget deliberations delivering an ultimatum to his opponents: reject this and face a snap election. He ended it revelling in the humiliation of his Labour opponents. They had begun by criticising the Budget, then added an amendment and finally abstained on the whole package, including their amendment.

A triumphant Mr Salmond said later: "I am delighted. Parliament has voted through a historic first Budget and Labour and the Liberal Democrats seem utterly disorientated."

Click here for the Scottish Budget: Key policy plans laid out

Labour leaders defended their decision to abstain, despite getting their amendment passed, insisting they were making a point that the Budget was flawed.

But political opponents warned that Labour's baffling voting behaviour cast further shadows over Wendy Alexander, the party's embattled leader, who is still awaiting the judgment of the Electoral Commission on an illegal donation to her leadership election campaign fund.

A preoccupied Ms Alexander hurried away from Holyrood, leaving it to her deputies to explain Labour's strange approach to the vote. There were some suggestions Mr Salmond's threat to call an election had frightened Labour off from voting against the Budget, but that was denied by party leaders.

However, there was no doubt that last night's vote, at last, has given the SNP administration a licence to govern.

For nine months, the Scottish Government has put forward policies, not knowing whether it would have the money to carry them out. Now it has the resources to freeze council tax across the country, abolish the Forth and Tay bridge tolls, complete the M74 extension and start scrapping prescription charges.

John Swinney, the Finance Secretary, who has cajoled and threatened MSPs from all parties since last summer in an attempt to get this financial package through, was clear last night on how important the vote was.

"Everybody said at the outset that this would be our biggest challenge. We have just passed that challenge," he said.

The Budget was carried on the back of support from the Tories and the independent MSP Margo MacDonald. Both were promised money for their own policy proposals as Mr Swinney tried to secure a majority for the minority government.

The final vote was 64 MSPs in favour (the SNP, the Conservatives and Ms Macdonald); one against (Labour MSP Cathy Craigie, who either voted that way by mistake or because she did not know the party position) and 60 abstentions (the rest of the Labour MSPs, the Liberal Democrats and the Greens).

The SNP's chances of success were in doubt until Mr Swinney made his opening speech, offering fresh concessions to opposition MSPs.

The Tories decided to support the Budget after he said he would do as they wanted and accelerate the business rates relief scheme.

The Greens also got what they wanted when Mr Swinney announced an extra 4 million for bus operators to help keep fares down and encourage greater use of public transport.

This was enough to persuade the two Green MSPs to abstain on the Budget – the vital, last piece in the jigsaw, giving the SNP the numbers necessary to get the package through.

These final concessions came on top of earlier moves to get the Tories and Greens on board, including an extra 10 million for an additional 300 police officers and 4 million more to fight climate change.

The Tories were derided by Labour and Liberal Democrat MSPs for helping the SNP.

Tavish Scott, the Liberal Democrats' finance spokesman, described the settlement as a "Nat-Con" budget. He labelled Mr Salmond's threat to resign if the Budget had not been passed as "a landmark strop".

Iain Gray, for Labour, said the Budget deal was nothing more than a "tartan Tory tango", and he also derided Mr Salmond's threats to quit.

"The unedifying pantomime of a First Minister threatening resignation from behind the safety of deals already done is an act of vacuous bravado which sums up his government's approach to this whole process," he said

But Annabel Goldie, the Scottish Tory leader, was delighted with her party's achievements. "We have used our influence to deliver key policies, which will mean more police, lower taxes and a new national drugs strategy," she said.

"Nearly two years ago, the Scottish Conservatives first argued for a new politics and an end to coalition government. We fought the Holyrood elections promising to work issue by issue, vote by vote, doing what was right for the people of Scotland by sticking to our policies and principles.

"We have done that today, and Scotland is the winner."

During the debate, Mr Swinney had appeared to win the short-term political battle with Labour, outflanking his opponents by accepting their amendment, which called on the Scottish Government to find ways of promoting skills and protecting the vulnerable. This was some way short of Labour's attempt earlier in the process to try to secure funds for skills academies or vocational colleges.

Mr Swinney decided to accept it, the SNP voted for it and the amendment was passed.

Yet, despite having changed the Budget in the way they wanted by having their amendment passed, Labour leaders then decided to abstain on the Budget itself – a decision that astonished everyone else in the parliament.

"You couldn't make it up," Miss Goldie said.

Mr Gray defended his party's position, claiming Labour had secured an amendment to the Budget and registered its view that the financial package was flawed. "We didn't have to vote for the Budget, because the SNP, the Tories and Margo MacDonald were all going to vote for it anyway," he said.

KEY POINTS

BUDGET WILL DELIVER:

Council tax freeze

Forth and Tay bridge tolls scrapped

11bn for health (90m to cut waiting times)

2.5bn for education (process starts to cut class sizes)

880m for roads (including M74 extension)

CONCESSIONS MADE:

10m extra in 2008-9

40m extra over three years for extra 500 police

4.3m extra for community climate challenge fund

4m extra to keep bus fares down

Accelerated business rates relief for small firms

New fund to help Edinburgh as capital

Click here for the Scottish Budget: Key policy plans laid out