LEADING housing groups have demanded a crisis meeting with Scottish ministers over what they have slammed as a "disappointing" budget settlement.

Shelter Scotland and other organisations say the cut of 6% in real terms in affordable housing will "undermine" the government's social justice objectives.

They also say the removal of local authority "ring-fenced" funds for housing is another damaging blow.

The complaints stem from the SNP government's first spending review, which was announced earlier this month by finance secretary John Swinney.

Nationalist ministers used the three-year spending deal to freeze council tax and cut business rates, but in so doing allocated less cash for education.

Now housing groups have voiced their objections to a budget they believe will not help meet the target of building 30,000 new affordable rented homes over the next three years.

The SNP government's draft budget shows the affordable housing budget will be cut by 6% in real terms next year, from £387 million to £373m.

It will then jump to £446m in 2009-10, a surge that is followed by a smaller increase to £472m by 2011.

Overall housing and regeneration spending is also to be cut next year, from £480m to £475m.

The SNP government also confirmed that large chunks of the housing budget will no longer be ring-fenced for local authorities to spend for that purpose.

The budget has prompted four groups - Shelter Scotland, the Scottish Federation of Housing Associations, the Scottish Churches Housing Association, and Scottish Council for Single Homeless - to send the government a joint letter outlining their concerns.

It states: "We are so disappointed by the budget settlement. At a time when a clear case for 30,000 affordable rented homes had been made; when we have major targets on homelessness, fuel poverty and housing quality to meet; when the government has set out a further range of ambitious reforms, we believe that the government's ability to deliver on these has been seriously undermined by the budget settlement."

The letter continues: "By our reckoning, the settlement poses a real terms cut of 6% in new affordable housing next year, when we were optimistic that there would be a clear demand on housing providers to ramp up supply."

However, the SNP believes that the budget reflects the "tight" spending settlement imposed on Scotland by Westminster.

The Scottish government could not be contacted last night.

Labour's shadow communities minister, Johann Lamont, said: "The SNP's housing plans are in disarray.

"Our leading housing organisations are right to demand urgent talks with the SNP. They have overpromised and are set to under deliver."