Scotland is to get a higher share of EU regeneration funds – after UK ministers raided money originally allocated for England.
The UK Government said the move, which will give Scotland's poorer communities an extra €228 million (£193m) over seven years, proved the union's benefits.
Scottish ministers said Westminster caved in to pressure from Edinburgh.
Scottish ministers claimed last month that Scotland would suffer a cut of up to one-third in its EU structural funds, after the EU cut its overall budget.
In a letter to First Minister Alex Salmond, Prime Minister David Cameron announced there would be a 5% cut for Scotland, England, Wales and Northern Ireland, after a decision to share cuts across the UK
He wrote: "This decision will provide Scotland with the funds it needs to help deliver strong, sustainable growth and I hope it will carry your support".
He said due to the budget cut, the UK would also save £3.5 billion of taxpayers' money in EU contributions over five years.
A Coalition source said: "This is a really good deal for Scotland, and questions need to be asked about how an independent Scotland would have fared."
Scotland will get €795m (£674m) over the seven year period, €228m more than under the original formula.
Scottish Secretary Michael Moore said: "By sharing the cut in EU structural funds across the UK, the government is protecting Scotland from the big cut we would otherwise receive."
Deputy First Minister Nicola Sturgeon said: "The cuts of more than 30% to Scotland's allocation were communicated to us by officials in the UK Department for Business, Innovation and Skills in February and represented a bad deal for Scotland negotiated by the UK Government."
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