TALKS are to continue between finance secretary Johns Swinney and his Labour counterpart Iain Gray on how to direct more money into the bedroom tax crisis, after the Budget Bill was given initial approval last night.

Labour conceded that the extra £20 million put in to Discretionary Housing Payment was capped, but Mr Gray insisted that "with a little imagination" other ways could be found to help tackle the crisis. "Where there's a will there's a way," he added.

He said: "While there have been challenges in setting this year's budget as a consequence of the macroeconomic failures of the UK Government, and the budget cuts they have imposed, this is also a budget that comes at a particularly exciting time for our nation when the eyes of the world will be on Scotland."

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The Budget confirms plans for £59m to be spent over two years to provide more free childcare places, taking the total extra spend over that period to about £250m.

Funding of £55m over two years for free school meals for youngsters in primaries one to three is also set out in the Bill as part of a £114m package of help for young people.

It also proposes spending £68m in each of the next two years to mitigate welfare reforms introduced by Westminster, as well as £20m this year and next year to limit the impact of the so-called "bedroom tax".

LibDems voted for the Budget while saying it was "not perfect" but the Tories called it "weak" and refused to back it.