Inverness and Shetland could be set to lose out after it was claimed cash to build affordable houses in Scotland is facing a £140million cut.

Labour housing spokesman Johann Lamont, the party’s housing spokeswoman, warned the affordable housing budget is set to fall from £313.7million to £171.1million.

It comes after Labour released a document prepared to assist councils with planning for 2010/11 which warns them to prepare for a 45% cut in affordable housing funding across Scotland.

The Government say this is because more than £100million was taken out of the 2010/11 Budget and spent this year to boost development during the recession.

But Ms Lamont said: "The scale of the cuts imposed by the SNP Government is frightening.

"It looks like the SNP is asking the housing industry and local communities to pay the price to protect its own party political priorities, like the centrally-imposed council tax freeze. I believe ministers are making the wrong choices."

The affordable housing budget funds programmes for housing associations and council house building.

The biggest cut is in the Highlands, which will see its housing budget reduced from £32million to £17million. The Shetland Isles is facing a reduction of over £1million.

The figures exclude Glasgow and Edinburgh because they are funded in a different way.

There are currently 140,000 people on council house waiting lists, according to Labour.

But a Government spokeswoman said £120million was "accelerated" from 2010/11 to this year in order to support affordable housing during the downturn and help boost employment in the struggling construction sector.

She said: "By definition, that boosted spending available to fight recession in 2009/10, and reduced it correspondingly in 2010/11.

"It is totally dishonest to ignore the £120million advanced from next year's budget and £75million in subsidies which will give local authorities the flexibility to borrow £200million for house building.

"Obviously when you bring forward money, the year you bring it forward from is always going to show a lower figure. It was spent early because we wanted to make sure that during the recession we maximised the amount of spend."

Industry leaders recently warned they are facing the worst crisis since the Second World War, Ms Lamont said, with 41% fewer new homes completed in the last quarter of 2009 compared to the previous year.

Housing charity Shelter say that the overall drop, including Glasgow and Edinburgh, will be £204million.

Shelter Scotland director Graeme Brown said today he was disappointed that the Government failed to "fill that gap or invest more".

He said: "Housing must be at the heart of the political agenda in the months and years to come, or thousands will be left waiting for a home."