A row has erupted over a decision by Michael Forsyth, Secretary of State for Scotland, to transfer responsibility for further education bursaries from local authorities to colleges.

Rosemary McKenna, president of the Convention of Scottish Local Authorities, condemned the announcement as "absolutely outrageous". Mr Forsyth had agreed only last month to COSLA's request for full consultation on the issue, involving local authorities and student bodies. "We can only say that the secretary of state speaks with forked tongue," she said.

Mr Forsyth insisted he had told COSLA that he aimed to effect the transfer from next April, when the nine regional authorities are replaced by 29 single-tier councils.

"Devolving this responsibility to the colleges will lead to increased responsiveness, with students being told much more quickly whether or not they are to receive a bursary, or how much," he said.

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But the National Union of Students Scotland angrily attacked the move as not in students' interests, and called on Mr Forsyth to reconsider. Douglas Trainer, Scottish president of NUS, said: "Since becoming self-governing, some colleges have tended to become self serving, interested solely in running the courses they perceive as bringing in income. With control of student awards, they will have full control of what they choose to offer, not what students and the local community may want."

Delegates at NUS Scotland's council passed an emergency motion warning that five months was not long enough for colleges to set up the new system, and that students would face delays and mistakes in their bursaries.

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John Sellars of the Association of Scottish Colleges said that despite the short timescale colleges could be entrusted with the role.

"Colleges see themselves at the heart of their communities, with a responsibility enshrined in law to provide further education," he said. "At no time has the association and its member colleges criticised the operation of bursaries by local authorities. However, it feels the present bursary arrangements are illogical and need to be made closer to the point of delivery."