There was widespread relief in the north yesterday that the government had recognised the continuing need for a separate economic focus for the Highlands and Islands.

There was widespread relief in the north yesterday that the government had recognised the continuing need for a separate economic focus for the Highlands and Islands.

It had been feared that ministers, in their zeal to reform the much maligned Scottish Enterprise, might threaten the distinctiveness of Highlands and Islands Enterprise. However, John Swinney's announcement ensured HIE would not only continue but, uniquely among the regions, would have two seats at the new national strategic enterprise forum.

Its nine Lecs and their accompanying structure will be removed, and 100 Lec directors will lose their role. But HIE is looking to involve 500 business and community leaders so they can have their say on development issues across the region.

The Lec local offices will be retained ". . . to reflect the diverse nature of its areas within a large land mass".

At the same time, HIE is being encouraged increasingly to share offices with other public sector bodies such as councils, or Scottish Natural Heritage. But there will be no compulsory redundancy among the 550 people employed across the network and no plans at this stage to seek voluntary redundancy or early retirement.

HIE's unique social development role is also safe, allowing it to continue its work on supporting community buyouts and the promotion of Gaelic.

Sandy Cumming, HIE chief executive said: "John Swinney's announcement recognises the importance of HIE's experience and commitment to the special challenges of this dispersed region. I particularly welcome the inauguration of a national strategic enterprise forum and the opportunity this will give us to contribute to discussions on the direction of the national economy at the highest level."