JACK McConnell was last night accused of offering councils a pre-election "bribe" to force them to make greater use of controversial private funding initiatives (PFIs).
The First Minister announced a new back-up fund from which money will be released for school building projects.
Opposition parties have denounced the scheme, claiming it is aimed at forcing councils which are opposing PFI, or public-private partnerships, as they are known now, to change their minds. Mr McConnell was accused of deliberately keeping back cash in a way which would penalise the residents of councils which wanted to finance school building and refurbishment programmes by alternative methods of funding.
The policy is set to become a contentious issue in the run-up to next year’s Scottish Parliament and local government elections. The SNP and trade unions have already united in opposition to PFI schemes.
Mr McConnell, speaking during a visit to West Dunbartonshire, where the local authority is opposing PFI schemes, said a small number of opposition-led councils were depriving schools of key resources for "political reasons". He said councils which opposed private finance schemes would be able to claim a share of the cash - if they changed their stance.
Denying he was trying to coerce opposition councils into toeing the Executive line, Mr McConnell said: "We’re not holding back money from councils, we’re making money available to councils.
"You can see in Glasgow and other parts of Scotland the fantastic benefits that have come through the programme in improving education.
"I think it’s an absolute tragedy that some councils, for party political reasons, are choosing not to take part in this national programme."
Alasdair Morgan, the SNP’s finance spokesman, said the scheme was nothing more than a bribe to councils, many of whom were seriously looking at alternative methods.
He pointed out that West Dunbartonshire Council, run by a coalition of SNP, independents and Scottish Socialists, believed alternative funding methods should be considered by the Scottish Executive and that PFI is dropped.
He said: "Jack McConnell is holding back money for public building projects so he can pursue his privatisation scheme, which takes money out of public services and stuffs it into the pockets of private financiers. This is an indication that Labour are running scared of the SNP policy of not-for-profit trusts."
A source close to Mr McConnell said the size of the back-fund was yet to be decided, but confirmed cash due to be allocated in December would be held back until after next year’s elections.
In June, the Executive announced a 1.15 billion package of PFI schemes for the building and refurbishment of 300 schools.