The money is dependent on a full report into how the company ran up debts of �2m and assurances that its merger with Scottish Ballet will be completed.

However, the announcement has met with criticism from politicians who point out that this is the third time the company have been bailed out financially.

Sam Galbraith: "Secure future"

Announcing the funding pledge, Scottish Arts Minister Sam Galbraith said: "This company was on the brink of bankruptcy.

"We have sorted that out. Secured it for the future.

"We can now take our time to look at what the future is and make sure they are the national companies that we want, the national companies that are funded properly, and the national company that not only enriches our lives, but also enhances our perception overseas.

"It will draw in others, will draw in business, and be of all-round benefit to Scotland."

Duncan McGhie, of accountancy firm PriceWaterhouseCoopers, who has been appointed chairman of the newly-merged organisation, said: "We've got this base now of great people, great company.

'Solid basis'

"A solid financial basis to move forward. Not that it will be easy.

"This is not to say that this is a one-off thing that will make for an easy life for Scottish Opera/Scottish Ballet.

"We've got to be very careful. We've got to be astute in the decisions we take, but I think we've got to be bold as well.

"A company like this will not develop if we are over-cautious. Equally, if we are over-cautious then there are dangers."

Scottish National Party culture spokesman Mike Russell said: "I think we should have had the report first.

"I mean, we need to know what happened in Scottish Opera before there could be any question of giving them money.

"For the money to be handed over without the Scottish Executive knowing either is incompetent or is trying to cover something up."