A prominent economist has urged the Chancellor to slow his austerity drive or risk derailing the fragile economic recovery in Scotland.

Noting that growth in Scotland has been supported by investment in building projects like the new Forth Road Bridge, Brian Ashcroft, Emeritus Professor of Economics at the University of Strathclyde, warned cuts in public spending could choke off growth.

Mr Ashcroft is concerned the recovery is too dependent on spending by consumers who are borrowing heavily to make up for low growth in wages.

"We should not underestimate the threats to the recovery from rising household debt, little growth in real wages, the dark shadow of further austerity and the rising possibility of Greece leaving the euro," said Mr Ashcroft.

He gave his warning as The Fraser of Allander Institute at Strathclyde University cut its forecasts for growth this year to reflect signs the recovery slowed in the first half.

The Institute said the oil price plunge since last June may have had a greater negative impact on businesses and jobs than it had expected.

In its latest quarterly economic commentary sponsored by PwC, the institute said the softening of growth suggested by business surveys in the first quarter may have reflected early cut backs made by the oil industry in Scotland.

Mr Ashcroft said the institute still expects the positive effects of the resulting fall in petrol and energy prices will provide a boost to the economy overall.

But he is concerned the Conservative Government's plans for continued austerity could have a very damaging effect on the economy at a time when sectors like services and manufacturing are treading water in Scotland.

George Osborne is expected to detail plans for further deep cuts in public spending in The Budget on July 8.

He wants to slash £12bn from the welfare budget.

Mr Ashcroft said: "To the extent that you are actually focusing your tightening of the budget on spending cuts in areas like welfare, where the recipients spend all they get, because they're relatively poor, then it has an immediate carry through, whereas if you raise taxes that has an impact on savings and doesn't carry though so strongly."

Mr Ashcroft said there is no evidence that austerity will weigh harder on Scotland than the rest of the UK. However, he noted a significant proportion of the population in western Scotland could be affected by cuts in welfare spending.

Paul Brewer, a partner at PwC in Scotland who specialises in the public sector, said the effect of spending cuts may become more apparent in the country this year, as local authority budgets come under increased pressure.

Mr Brewer noted that public sector investment in infrastructure projects such as road building had provided an important boost to activity, amid fairly limited spending by local businesses.

Strong flows of foreign direct investment have also helped support growth.

However, the commentary voiced concern that growth in Scotland and the UK over the medium term is forecast to depend on debt rising to above the level associated with the financial crash of 2008.

Key industries are struggling to make headway in Scotland, which is lagging the UK in terms of growth in output and jobs.

"The service sector has not demonstrated the levels of growth experienced in other UK regions and that remains a cause for concern," said Mr Brewer.

The commentary said the recovery in the financial services sector had faltered.

It said growth of 1.4 per cent in manufacturing output last year was very weak for an economy supposedly in a strengthening recovery phase.

Scotland may be under-performing the UK partly because research and development activity has increased more strongly south of the border.

Fraser of Allander has cut its estimate of growth in output this year to 2.5 per cent, from 2.6 per cent in March. The estimate for 2016 is cut to 2.3 per cent from 2.4 per cent. It forecast growth of 2.3 per cent in 2017.

However, with growth expected to outstrip the two per cent trend rate, around 150,000 jobs could be created in Scotland over the period, net of losses. The unemployment rate is expected to fall to 3.9 per cent in 2017, in line with pre-recession levels, from 5.1 per cent in 2015.