Culture minister Linda Fabiani has defended her handling of Creative Scotland and attempted to play down fears that the rising transition costs will mean less money for artists. She insisted that the bill for the troubled merger of the Scottish Arts Council and Scottish Screen will come out of the two organisations' combined budget of £70 million, rather than the government footing the bill, and vowed that artists will not lose out.

"People are always scared about change, and that's perfectly natural," she said. "We have to look at the transition costs. We, as a government, have a policy of no compulsory redundancies, so we have to look at that and the costs of establishing the organisation. But what is uppermost in my mind is what the benefit to the arts would be."

She also declined to put a figure on how much it will cost to set up Creative Scotland, and revealed no figures will be confirmed until next year.

Two weeks ago, the team in charge of forming Creative Scotland delivered several funding proposals, which Fabiani's team is currently studying. She said that once the transition costs are calculated they will look at similar examples of how public bodies have been brought together in the past.

Last week, the government revealed its twin-pronged plan to bring Creative Scotland into being. On Wednesday, it reappeared in Holyrood only three months after it was voted down in the SNP government's first defeat at Holyrood. First minister Alex Salmond announced that Creative Scotland's financial memorandum would be attached to the Public Services Reform Bill, which finance minister John Swinney will guide through parliament.

Fabiani said the bill is expected to be brought before MSPs early next year, but no details of how much Creative Scotland will cost or what form it will take will be announced before then.

At the same time, Creative Scotland will be set up as a limited company, with a board, chair and chief executive in place by April 2009. The same model was used for establishing Bòrd na Gàidhlig, the Gaelic development agency.

Despite mass criticism from the arts world, Fabiani insists that the relationship between the government and the joint board of the Scottish Arts Council and Scottish Screen is "fine", although both parties admit they are exasperated with the slow process. "We all want to get this up and running. For the joint board it is incredibly frustrating because they aren't seeing the day-to-day processes of parliament," she said.

But Fabiani says she remains resolute on the need for change. Artists, she said, feel they have to "jump through hoops to do the simplest things" in the current muddled set-up.

"People all along have been saying change is required, and when it comes along, transition is difficult. We have to keep it in perspective."

Fabiani also cast doubt on whether she will still be culture minister next April. She said: "Nobody is secure in a job." She did, however, point out that she "didn't feel threatened professionally in any way" after the Creative Scotland debacle.