Directors said the number of social workers has risen by a quarter

The Association of Directors of Social Work said there has been a 10% rise in the number of children being looked after by local authorities since 2001.

It said there was a 60% gap between what councils were spending and the funds given by the Scottish Executive.

However, the Scottish Executive said it has increased funding for social work services by �984m since 1999.

Holyrood's education committee was set to study the report and was expected to call for a funding increase.

The association said there were currently 1,500 children in residential care, 3,600 in foster care, and 7,000 receiving support either at home or in the community.

It said the number of social workers must be increased by a quarter to 4,700 to cope with the extra workload.

Local government has been investing in children's social services at the expense of other council services David Crawford ADSW President

Scottish Executive funding has not kept pace, according to the directors.

The report, by Professor Arthur Midwinter of Strathclyde University, puts the shortfall at �161m or 63% of the budget.

ADSW President David Crawford said costs had increased due to new care standards and social work service requirements introduced by the executive.

"Local government has been investing in children's social services at the expense of other council services," he said.

"This is because the allocation for these services has not kept pace with changing demand, much of it arising from the executive's own work."

Fiona Hyslop, the SNP's education spokeswoman, said the executive had failed to meet the needs of core children's services.

'Improved services'

She added: "The conclusions of this report raise serious questions about how seriously Jack McConnell's government are taking this important issue.

"He wants to put more children in care but this crisis in funding places a large question mark over his government's ability to do so.

"I raised this matter with the minister today in committee but he has passed the buck to the minister for local government."

However, an executive spokesman said funding had increased by more than 82% over the past seven years.

"These increases should certainly help councils to deliver improved services for vulnerable children," he said.