Senior Tory Michael Gove said a UK scheme to fund Scottish councils directly from Westminster, bypassing Holyrood, has drawn interest from across the country.
The government minister said bids for the £800million “levelling up” cash had come from a range of councils a week before the Chancellor is expected to set out more details.
It has been controversial and was criticised for “undermining” the union and devolution.
Mr Gove, promoting the scheme at a briefing in London, said he “respects” devolution and hopes the money will help all parts of the UK.
“It works and we want to strengthen it,” Mr Gove said.
“It’s also the case that alongside that, people in Scotland, Wales and Northern Ireland have two governments and they need to see both serving them appropriately.”
He said it sometimes looks like a “political rammy” on the surface but stressed there is a lot more going on in the background.
It would be odd if the SNP put ideology ahead of co-operation.”
“There is a UK-wide pot and we’ve asked each of the local authorities across the United Kingdom to bid into it,” he said.
Funds are allocated by a set of criteria and will be published along with the allocations soon.
“What we aim to do is to say every part of the UK is being treated fairly,” he said.
Asked if there were many bids from Scottish councils already, Mr Gove confirmed said yes but refused to say how many and from which authorities.
Interest from Western Isles to Aberdeen
Contacted individually, a number of councils confirmed they were interested.
Western Isles Council intends to submit two bids – one for transport worth £50million and one for culture and heritage at £20million – in the next round of funding.
Aberdeen City Council submitted a bid in June as part of a city centre and market redevelopment.
Highland Council wants UK funding to improve roads and infrastructure along the North Coast 500 tourist route.
It would be tied in with an expansion of electric vehicle charging points.
The authority also hopes for UK funds for an environmental and cultural regeneration scheme in Inverness.
And it wants cash to boost employment opportunities in Wick and the wider Caithness area.
Aberdeenshire council said officials are looking at possible projects for that meet the fund’s requirements.
Moray did not make an application in the first round but the council is in “regular contact” with the government and would consider its position for round two.
Minister for the union
Mr Gove retained his post as “minister for the union” in Boris Johnson’s recent cabinet reshuffle.
While the focus is on “shared prosperity”, he claimed concentrating on another referendum will be seen as a “total distraction” for the public.
Mr Gove repeated the claim Scotland is in a “union of consent” which was tested in 2014.
“The idea the United Kingdom is held together by some authoritarian mandate is manifestly nonsensical when you look at the rest of the civilised world,” he said.
‘More than happy’
Mr Gove also defended plans to make money available to improve major roads in Scotland.
“It would be odd if the SNP put ideology ahead of co-operation,” he added.
He also appeared relaxed about sharing credit with his SNP opponents, including finance secretary Kate Forbes.
Mr Gove said: “I am more than happy for Scottish Government minister to take the credit for good things that happen in Scotland.
“If Kate Forbes gets the credit for investment in Scotland, great.”
Reacting to the “levelling up” plan for Scottish funding in summer, SNP minister Richard Lochhead said: “Increased public funding for Scotland and Scottish stakeholders is always welcomed.
“However, increasing the number of funds available and making spending decisions based on a UK Government, rather than a Scottish, agenda only adds to the complexity of the funding landscape, and creates a confused, incoherent policy framework and financial inefficiencies.”