Treasury's plans for Crown Estates funds a blow for First Minister

ALEX Salmond's hopes for a power grab over Crown Estates assets in Scotland have been thwarted by the Treasury which will today announce two new coastal towns funds for Scotland.

Lib Dem Chief Treasury Secretary Danny Alexander will use a visit to Stornoway to unveil a new scheme to support economic development in coastal communities from half the money raised by the Crown Estates from marine sources.

The scheme will be run independently of government by the Big Lottery and will be split into five areas including Highland and Islands, the rest of Scotland and one each for England, Wales and Northern Ireland. Overall, the pot of cash is worth 23.7 million and in Scotland there will be 1.85m to be used in the Highlands and Islands and 2.05m for the rest of Scotland.

The other 50 per cent of money raised from marine sources will continue to go to the Treasury to fund services.

However, as Scotland and the UK begins to invest more in offshore renewables - including wind turbines and wave power - it is expected that the amount will increase significantly.

The announcement has come despite the SNP making the devolution of Scotland's Crown Estates property one of its key economic demands in the short term along with extra borrowing powers and control of corporation tax rates.

On three visits to London since the SNP won an historic majority in Holyrood, Mr Salmond has pressed the case for control of the property, especially the seabeds, on the expectation that it will support Scotland's efforts to become the "Saudi Arabia of renewable energy".

But the announcement today will effectively be a snub for Mr Salmond's ambitions and shut for the door to devolution of the Crown Estates.

However, Mr Alexander has insisted that the UK government is "still willing to listen" and "consider" the SNP's demands.

His announcement, however, also comes ahead of a Scottish Affairs Select Committee report which is expected to recommend much greater devolution to local communities so they can benefit directly from investing in their local seabeds.

The Scottish Government welcomed the funding announcement but warned it still does not go far enough. Finance Secretary John Swinney said: "We welcome the fact that Scotland's coastal communities will now benefit from their own resources, but it is only because of pressure from the Scottish Government that Westminster is taking any action on this issue, and this paltry announcement does not go nearly far enough."The Treasury has hit Scotland's offshore oil and gas industry with a 2 billion tax grab and is also withholding around 200m of Scotland's money in the form of the Fossil Fuel Levy - now they appear to be trying to buy off Scotland's coastal communities by offering them only 50 per cent of their own resources.

"Those communities need to benefit from all of the money raised from Crown Estate revenues in Scottish waters.

"This is Scotland's money, and devolving full responsibility is vital if Scotland is to make the most of our vast offshore renewable energy potential," Mr Swinney added.