PROJECTS and businesses in line to receive EU funding will still receive the cash even if the UK has left the bloc before it is paid, the Chancellor has said.

There had been fears that Scotland could miss out on up more than £5 billion in funding by 2020 as a result of Brexit, with cash already in the pipeline thrown into doubt by the EU referendum result.

Among the payouts said to be in danger were those earmarked for farming subsidies, a scheme to develop food, drink and rural businesses and projects designed to stimulate growth and combat poverty.

However, the UK Government has now confirmed that it will step in to match the investment even if the country is no longer a member state, with the policy applying to thousands of organisations UK-wide.

The current level of agricultural backing, which underpins the farming industry, will also be matched by the Government until 2020, when it will be replaced by a new scheme, even if it has left the EU before the end of the decade.

The move follows a call from Nicola Sturgeon, who while unveiling her own £100 million stimulus package this week called for the Treasury to provide certainty around the crucial money.

Philip Hammond said that all structural and investment fund projects, including agri-environment schemes, signed before Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU.

The Treasury will also put in place arrangements for assessing whether to guarantee funding for specific structural and investment fund projects that might be signed until Britain's departure EU.

The guarantee will also apply to UK organisations that win European Commission funding on a competitive basis, such as universities that successfully win research cash.

Mr Hammond said: "The UK will continue to have the all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.

"We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.

"That’s why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave. The Government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, who play a vital role in our country."

He added: "We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities."