MINISTERS will next week snub Scottish university principals by telling them they cannot have extra funding to match English top-up fees, according to the final draft of a report, details of which have been leaked to The Herald.

The decision will enrage the higher education sector, which maintains the introduction of fees from 2006 will give English universities a funding advantage of (pounds) 150m a year.

The draft report of the third phase of the Scottish Executive's higher education review says Scottish principals have been too pessimistic about future funding. It also argues that the full impact of top-up fees will not be seen in England until 2010/2011, an indication that the executive may be preparing to kick the problem into the long grass until after the 2007 Holyrood election.

A row has already broken out over the report's findings. Principals, lecturers' unions and student bodies participated in the review, but refused to endorse the report, despite being asked to do so by the executive. They asked simply to be described as contributors.

There are also allegations that the review is being ''spun'' by the executive to demonstrate that the Scottish sector is better off. One phrase in the draft report states: ''There is broad agreement across the whole higher education sector that higher education is currently better funded in Scotland than in England.''

This sentence is understood to have been withdrawn in the final version, following protests from principals and unions, angered that the bald statement failed to take account that, proportionally, Scotland has many more students in higher education, and on more expensive courses, than England - costs that explain the extra funding.

One source within higher education said last night: ''The executive tried to be very open in the way it gathered the data for this report. It tried to get agreement on the evidence base, but by spinning that very evidence base, it has lost our trust that the executive understands what the scale of the problem is.''

The report quotes Universities Scotland's figure of (pounds) 38m for staff pay and modernisation, but makes no commitment to meeting this. It does accept that 50% of university buildings are in need of major repairs, quoting (pounds) 430m as the estimated cost.

A spokesman for Universities Scotland said: ''We are now happy with what is in the report and we think it is a useful contribution to the case for greater funding.''

An executive spokeswoman stressed that the final version had not been ''signed off'' by the steering group and would go to ministers tomorrow.