A new row has broken out between Holyrood and Westminster after Scottish ministers calculated that Scotland is to lose £315m to fund the London Olympics in 2012 - £165m more than first thought.

Governments in Edinburgh and London are already at loggerheads over £150m of lottery funds that are being diverted from Scotland to pay for the games. Now Scottish ministers claim the Treasury is to withhold a further £3m a year over the next five years to pay for the regeneration of the East End of London.

In normal circumstances, for any spending on services that are devolved, Scotland gets 10%. The funds are referred to as “Barnett consequentials”. Olympic money is being treated as a special case, however.

Recently, MPs accused the organisers of the 2012 games of being “willing to spend money like water”. From an initial estimate of £3.4bn, the official bill is now put at £9.3bn.