THE Scottish Greens were last night on the cusp of striking a budget deal with the SNP in return for concessions on council funding and local taxation.

The minority SNP administration has relied on Green support to pass the last two budgets, but talks have stalled in recent days over extra funding for local government.

It raised the prospect of the first Scottish Government defeat on a budget in a decade when MSPs vote on it today.

However after a last-minute shuttling of emails between Green MSPs, officials, and Finance Secretary Derek Mackay, the two sides appeared in sight of an agreement.

Mr Mackay stressed he was “open to compromise” to get his £34bn budget passed, while Green leader Patrick Harvie credited the government with moving more than he expected.

The Tories urged the finance secretary not to raise taxes to placate the left-wing Greens.

The Greens are close to securing two key demands - one political and one financial.

The financial demand is for more funding for councils in 2019/20 to help address a £150m cut identified by the council umbrella body Cosla.

It is understood Mr Mackay, who met Cosla yesterday, is willing to remove the ring-fencing from around some budgets to give councils more control over how they spend their money.

He may also let councils hike council tax by 3% plus inflation, not just the current 3%.

Most of the changes involve tweaks to existing funds, and it is understood the Greens have been holding out for truly additional money before signing off on a deal. A statement is expected this morning.

The second demand is for a longer-term commitment to overhaul local taxation.

The Greens want to replace council tax with a 1% annual property levy, and for councils to have far greater powers to raise their own taxes and set business rates.

It is understood the government has agreed to discuss council tax reform, possibly through a cross-party forum, with a view to legislation by the end of this parliament.

However it would probably for the next parliament to decide whether to pass any new law.

In the short term, the government will also consider new local taxes such as a tourist tax.

The financial and political demands come as a package - unless the Greens agree to the revised council funding, they will not get the tax reforms they have long campaigned for.

Opposition parties said the Greens had always been likely to agree because of how it would look for Holyrood’s only pro-independence parties to fall out.

Mr Mackay has also been under pressure to find a deal because the SNP has contrasted Holyrood stability with Brexit chaos at Westminster.

A budget failure would also have undermined that message, as well as putting a dent in Mr Mackay’s leadership ambitions.

Mr Harvie told the Herald: “The government has moved more than I thought they would this time last week. We are continuing to work hard in the final stages to reach an agreement that will protect local services.

“The government know what they need to do. We will see where we get to.”

He also told ITV Border: “We are very hopeful that the Scottish government will give ground. Even Derek Mackay’s own party colleagues, SNP councillors who are leading councils in Scotland, are telling him that some of those councils are on the brink of crisis.”

Mr Mackay said: “There has never been more need for MSPs, of all parties, to act responsibly and not add to Brexit uncertainty. I urge all MSPs to unite behind the 2019/20 Scottish Budget - that is what people the length and breadth of Scotland expect.

“We are open to compromise in order to ensure we deliver the Budget that the country expects, and I am confident others will approach things in the same spirit.”

Tory MSP Dean Lockhart said: “Right across Scotland businesses are struggling to cope under an anti-business SNP government.

“Derek Mackay needs to stop the tax rises on people and firms, and set out pro-business plans to generate wealth, encourage investment and reward hard work.”

Labour urged all opposition parties to vote down the budget.

If the Budget Bill is defeated today, the government would be able to table it again, with or without revisions, for another vote almost immediately.

If there was a tie, the Presiding Officer would use his casting vote to continue the Bill.

Final budget and income tax votes are due in mid-February.