Scotland's university and college principals have attacked the Scottish Higher Education Funding Council for top-slicing Pounds 25 million for "marginal initiatives".
David Caldwell, director of the Committee of Scottish Higher Education Principals, welcomed the increase in higher education funds of 0.3 per cent above inflation, but said the committee was dismayed that it was not reflected in Shefc's allocations for core teaching and research, announced last week.
It calculates that these costs will rise by about 4 per cent this year, compared with a 2.5 per cent inflation rate, while Shefc has top-sliced 4 per cent of its Pounds 616 million total budget.
"The fact that some additional money is devoted to special initiatives is of little help if core needs are not adequately met," Mr Caldwell said.
Sir John Arbuthnott, principal of Strathclyde University, said: "Top-slicing should only take place where there is a compelling sector-wide need. Institutions can best make use of public funds if they know at the start of the financial year exactly what funds will be available to them."
Shefc's announcement was particularly disappointing in light of reports of the more substantial funding to English institutions, he said.
"While we are glad colleagues elsewhere are receiving a better deal, we in Scotland must be able to compete in the world marketplace on equal terms."
Scottish enterprise and lifelong learning minister Henry McLeish said the extra Pounds 16 million for higher education would widen access and develop Scotland's knowledge economy.
"This is another step on the road to developing the learning nation we spoke of at the launch of new proposals for student support in January. The future for higher education in Scotland has never been brighter."