It is understand around 50 bids have been submitted by local authorities across Scotland, with almost all councils producing bids.
This is understood to include Glasgow City Council, the home council of Nicola Sturgeon, led by the SNP’s Susan Aitken, who successfully retained control of the city at the local elections in May.
Confirmation comes after the First Minister on Friday attacked Tory peer Lord Frost for stating that devolution in Scotland may have to “evolve back”.
The SNP leader said this demonstrated the Conservatives are “coming for devolution” and the Scottish Parliament must be entrenched “through independence”.
However, Alister Jack, writing for The Scotsman, said the response to the levelling-up fund in Scotland demonstrated a “ringing endorsement of our true devolution vision”.
The Secretary of State for Scotland writes: “The success of the round one projects has led to a flurry of applications from Scottish councils the length and breadth of the country for the second round of cash.
"The deadline for applications passed recently and I can reveal we have received even more bids to this second round than we did in round one. It is a truly remarkable response, which speaks to the success of the UK Government’s approach.”
Mr Jack, who is a Boris Johnson loyalist and one of the few UK Government ministers not to resign during the dying days of the Prime Minister’s leadership, said councils of “all political colours” had recognised the fund to be a “great opportunity”.
He writes: “Many councils led by all political colours have applied in the last few weeks – because they recognise this as a great opportunity to seize the support on offer to do right by their communities.
“This is a ringing endorsement of our true devolution vision and our determination to work closely as we can with the people who best understand what their communities need.”
The levelling-up fund was labelled a “power-grab” by the Scottish Government and the SNP, who claim the funds deliberately bypass Holyrood.
However, Scottish Conservative spokesperson for local government, Miles Briggs, said more direct investment from the UK Government into Scotland could “only be a good thing”.
He said: “It is welcome that SNP council leaders have again ignored the cries of a power grab from their colleagues in Holyrood and submitted their applications to the fund.
“People across Scotland are not interested in political games. They just want investment delivered for their local area and the levelling-up fund is a perfect example of that.”
A Scottish Government spokesperson said: “While all additional funding for Scotland is welcome, it is unacceptable for the UK Government to again be deciding how money should be spent in areas of devolved responsibility without any meaningful consultation or engagement.
“Levelling up should not mean losing out for our communities. But the Scottish Government has no role in the fund’s governance, delivery or prioritisation of recipients.
“Scotland had expected to receive £400 million in consequentials from this Fund. Eight projects across Scotland have been selected to receive support, in total £171.7million, or just over 10 per cent of all awards.”
The SNP declined to comment.