MINISTERS have come under fire for decisions which led to the withdrawal of funding for a new Scottish university campus.

The Herald revealed on Monday that the Scottish Funding Council (SFC) discussed contributing to a multi-million pound development at the University of the West of Scotland (UWS).

The move would have seen the university’s campus in Hamilton town centre completely redeveloped, but the plan had to be scrapped after the Scottish Government told the SFC it wanted the money back.

Monica Lennon, a Scottish Labour MSP who campaigned for the retention of the Hamilton campus, blamed ministers for the removal of funding.

She said: “Despite warnings from the SFC, the Scottish Government knew all along the Hamilton campus would be cut loose and was prepared to kill-off the long-awaited redevelopment.

“With its excellent transport links and proximity to the town centre, this site has served students and the town well for decades.

“The Scottish Government, despite its big talk on promoting town centres and widening access to education, was willing to choke off funding for an otherwise viable project.”

A spokesman for UWS said work had now begun on a new campus on the outskirts of Hamilton.

He added: “We understand the SFC and Scottish Government view the project as a high priority and we are committed to continuing to work constructively with them to ensure the successful delivery of the campus.”

On Monday, the Herald revealed leaked papers highlighting a catalogue of blunders at the SFC, which distributes £1 billion annually to Scottish universities.

The dispute centres on £50m of unspent reserves within the SFC and a failure by officials to understand how they had acquired the sum or what to do with it.

Subsequent plans to invest the reserves in much-needed projects were thwarted when the Scottish Government became aware of the surplus money and demanded it was repaid to the public purse.

News that two universities suffered setbacks from the funding dispute is at odds with claims from the Scottish Government who suggested there would be no repercussions from the money being returned.

Rival parties claim the leaked report - compiled by accountants Scott-Moncrieff on behalf of the SFC - raises serious questions over a statement Education Secretary John Swinney made to parliament in December when he said all institutions had received all expected funding.

However, a Scottish Government spokesman said the independent audit report confirmed it had been consistent that the unallocated funds accrued should be returned to central government to support other priorities.

He said: “The report records that we formally notified the SFC in February 2014, in October 2014 and in March 2015 that the funds should not be committed elsewhere and this was acknowledged.

“The report also confirms these funds built up following the management of budgets between academic and financial years. This historical build-up of unallocated funds is not exclusively linked to the outcome of the 2011 spending review.”

An SFC spokesman said: “It is important to note that there have been no changes to the planned allocation of university funding.”