JOHN Swinney has indicated Scotland might not follow George Osborne's controversial move to end automatic annual pay rises for the thousands of public-sector workers.

The Finance Secretary hinted at the move to protect the living standards of Scotland's 570,000 civil servants, teachers, nurses, prison officers and police officers.

Such a move would reflect the SNP Government's strategy of putting as much clear political water between it and Westminster as possible in the run-up to the September 2014 independence referendum. But it would come an as yet unknown cost to the taxpayer north of the Border.

The Chancellor set himself on a collision course with millions of public-sector workers across Britain by planning to cut another 144,000 jobs in 2015/16, in a continuing clampdown on pay with a below-inflation 1% wage rise and a move to end automatic annual pay rises.

In his Commons statement on his spending review yesterday, Mr Osborne said continuing austerity would see another £11.5 billion shaved off UK Government spending for the 2015 election year. He targeted the so-called "progression pay" of many public workers who saw their pay rise year on year regardless of performance. The armed forces would be exempt.

It comes at a time when many workers in the private sector have suffered years of pay freezes or even cuts.

Asked if he would follow suit in his September spending statement, Mr Swinney adopted a different tone, saying: "We'll set out our approach to public sector pay in the budget as we always do but when you are undergoing a process of public-sector reform it's important to take your employees with you."

Later, Holyrood sources made clear ending automatic pay rises for public sector workers was "not our agenda but what we can do on this obviously depends on the numbers".

Trade unions branded the Coalition's move to end automatic pay "nasty", "deeply unfair" and "scapegoating" public sector workers.

In his spending review for 2015/16, Mr Osborne announced:

l a new welfare cap to include a range of benefits but not the state pension;

l stripping expatriate pensioners in warm countries of the right to claim winter fuel payments;

l new rules on benefits such as a seven-day wait before claiming and producing a CV;

l ensuring 100,000 non-English speaking claimants take up language lessons with the state picking up the £100 million annual bill.

The Chancellor claimed the UK was "moving out of intensive care and from rescue to recovery".

His spending plans for 2015/16, which saw some departments face another 10% cut in their budgets, only spared schools and the NHS in England, overseas aid and the intelligence services. Mr Osborne insisted they were based on the principles of "reform, growth and fairness" and would ensure the wealthiest fifth of society bore the biggest burden.

Ed Balls, Labour Shadow Chancellor, said the new round of cuts represented a "comprehensive failure" of the Coalition's economic strategy, saying: "This out-of-touch Chancellor has failed on living standards, growth and the deficit, and families and businesses are paying the price for his failure."

In Scotland, the 2015/16 settlement will mean SNP ministers will have access to increased capital spending of around £300m but will lose £400m from their current spending budget as part of the £11.5bn savings.

Michael Moore, the Scottish Secretary, said the extra capital spending power was positive news for Holyrood and urged it to "now use it to invest in Scotland and help the economy grow".

Liz Cameron, of the Scottish Chambers of Commerce, said delivery of capital spending on connectivity and housing is likely to remain a "challenge."

Today, Danny Alexander, Chief Secretary to the Treasury, will unveil £100bn worth of specific infrastructure plans, expected to include new roads, railways and energy projects.