The SNP was clinging to power today after its £33billion budget was rejected on a day of high drama at Holyrood.
Last night, First Minister Alex Salmond put his party on an “election footing” and said his minority Scottish Government would be forced to resign from office if it cannot win support for its spending plans at a second attempt.
Yesterday’s vote was tied 64-64, despite frantic 11th-hour horse-trading with the Greens to win their support after Labour and the Liberal Democrats said they could not back the budget.
Presiding Officer Alex Fergusson used his casting vote to maintain the status quo – which means the government was forced to revert to its 2008-09 budget, which is £1.8billion less. The defeat is unprecedented in the 10-year history of parliament and the biggest crisis for the SNP since it came to power.
The budget bill has been resubmitted to parliament and fresh talks with opposition parties will start immediately. The spending plans are set to be discussed by a Holyrood committee next Wednesday and go to a vote again on February 19.
But the timetable could be accelerated if the Scottish Parliament agrees.
Mr Salmond said: “We believe the budget is crucial to the people of Scotland and it is our responsibility to place it back before the parliament.
“But clearly, if the budget cannot go through, the government cannot remain in office. Under these circumstances the normal thing would be to have an election, which I would welcome.
“Other parties could have the option of attempting to form an administration.
“However, my view is the people of Scotland would want an opportunity to elect a new parliament so for that reason I am putting the SNP on an election footing.”
He said the tied vote caused “substantial inconvenience” to health boards and councils, which had expected to be told next week how much funding they would get.
The budget would have included £70million to allow councils to freeze council tax for the second straight year.
Most councils were poised to make the decision on February 12, but that is now likely to be put back.
The SNP says 4,700 new jobs hang in the balance as the budget contained a £230million accelerated spending package aimed largely at supporting the construction industry.
The defeat was sparked by a row between the SNP and two Green MSPs, Patrick Harvie and Robin Harper, who were initially not satisfied with a £22million package for home insulation. They originally asked for £100million a year for 10 years and said they would accept nothing less than an additional £11million.
Finance Secretary John Swinney agreed to boost the fund minutes before MSPs voted at 5pm, but the Greens said they could not support the budget because there were too many conditions.
Labour and the Lib Dems rejected the budget as a “woefully inadequate” response to the economic crisis.
The Tories supported the government after securing concessions, including £60million in town redevelopment funding. Independent MSP Margo MacDonald also backed the spending plans in exchange for extra resources for Edinburgh.
Labour leader Iain Gray said last night that he and his colleagues are willing to re-open negotiations, but would be lodging a vote of no confidence in the SNP government if the budget falls for a second time.
“The SNP are in this position as a direct result of their own arrogance and incompetence,” he said.
Lib Dem leader Tavish Scott said: “We warned the SNP that this budget was an inadequate response to the recession. John Swinney must now bring forward a budget that is a real response to the economic storm – we are ready to talk.”
Conservative enterprise spokesman Gavin Brown said: “Labour and the Liberal Democrats have delivered a massive tax bombshell to local government finance.”
Mr Brown said more than 150,000 small firms will have to pay more tax because the budget included provision for cuts to their business rates.