Scottish Government money intended for restoring nature and improving biodiversity has been redirected towards local government pay awards.
Ministers said £5m from the nature restoration fund would instead be spent on pay settlements.
Separately, the Government has also confirmed it is reviewing its plans to open an international office in Warsaw.
The developments come after finance secretary Shona Robison said more cost-cutting measures are needed in order to balance the books.
Councils are facing a number of disputes with unions over pay.
The BBC reported the Government has written to councils telling them to divert the nature restoration fund money towards the pay settlements.
A Scottish Government spokesman said Robison had been clear about the “painful choices” which lie ahead.
The spokesman said: “Protecting and restoring our natural environment is key to addressing the twin crises of nature loss and climate change, and nearly £40m has already been distributed through the nature restoration fund since 2021.
“While capital funding of £5m from this year’s nature restoration fund has been redirected to fund the pay offer, it will be replaced in future years.”
“We know the vital role local government employees play in delivering local services which are valued by the public.
“This pay offer demonstrates just how much we value these workers too. It will provide an above-inflation pay increase for all council employees and ensure the most support is focused on the lowest paid.
“Ministers hope that members of GMB, Unison and Unite will vote to accept it.”
The Herald on Sunday reported the plans to expand the Scottish Government’s network of international offices into the Polish capital are on hold because of the spending review.
A Government spokesman said: “Our plans to open an office in Warsaw will be considered as part of the wider review of government spending.
“It is necessary to ensure resources are used economically, efficiently and effectively, and high levels of scrutiny are applied to expenditure.”
The Tories said the SNP are to blame for the reduction in the nature restoration fund – a pot of money which supports projects tackling climate change and nature loss.
Scottish Conservative rural affairs spokeswoman Rachael Hamilton said: “Scotland has so many species which are at risk of habitat destruction.
“So it’s alarming that the SNP would defund biodiversity conservation to plug other holes they have created in their own spending.
“Councils and NatureScot will be left with nothing to spend on preserving our beautiful natural environment for future generations.”
She added: “Nature should not be a trivial consideration for the SNP, as this would suggest.”
The Scottish Greens said the £65m fund was secured while they were in the Scottish Government and called on the Finance Secretary to maintain it.
MSP Mark Ruskell said: “The nature restoration fund is supporting vital projects all across our country, from building natural flood protections to safeguarding local species, restoring our waterways and improving our parks.
“It is enhancing our communities, by making them more welcoming and accessible while creating important jobs.
“Investment in natural flood management for example massively saves public money in the long run. We are in a climate and nature emergency, the two are linked and restoring nature in our communities is key.
“Investing in local services and our local environment should not be in opposition, they go together.”
Follow STV News on WhatsApp
Scan the QR code on your mobile device for all the latest news from around the country