University principals in Scotland have been awarded salary increases of more than twice the rate of inflation despite the tight financial climate facing the sector.

A survey by The Herald reveals that in 2006-07 university principals received an average salary of £162,000, a rise of 5.2% on the previous year. The increase represents an additional £142,000 taken out of the sector's annual budget.

The highest paid principals are Professor Duncan Rice, from Aberdeen University, and Professor Timothy O'Shea, from Edinburgh University, who get paid £209,000. Sir Alan Langlands, from Dundee, is paid £206,000.

Lecturers' representatives have criticised the rises, following a 3.5% deal for academic staff.

The biggest percentage increases were at Edinburgh College of Art, where principal Ian Howard's salary jumped by 15.5% to £112,000, and Glasgow School of Art, where principal Seona Reid got more than 14%, bringing her salary to £101,000.

Both institutions said this followed a UK-wide review of salaries of similar institutions.

Although universities are run as independent charities, at least half of their money comes from the taxpayer and the rises will be seen partly in the context of Prime Minister Gordon Brown's desire to peg public sector pay increases to 2%.

Recent public sector settlements have seen teachers given 2.5% or below in each of the next three years while police were awarded 2.5%. University lecturers were given 3.5%.

The increases follow an angry reaction from universities over the Scottish Government's Budget announcement in November, which institutions warned could damage research and leave them struggling to pay for salaries and mounting pension and fuel costs.

Strains over funding emerged the previous year after the signing of a pay deal for lecturers worth 13.1% over three years, which followed an exams boycott that threatened graduations.

In the aftermath of the settlement, both the universities of Dundee and Strathclyde warned of job losses, while Stirling University predicted a budget shortfall of £1.8m. Glasgow University had already shed 230 staff.

Terry Brotherstone, president of the lecturers' union UCU Scotland, attacked the increases.

He said: "There is a growing feeling that universities are being run as businesses in which the collegiality on which their past successes have depended is abandoned and senior managers are paid inflated salaries to get as much as possible out of their junior employees for as little reward as possible."

But a spokesman for Universities Scotland, which represents university principals, defended the increases. "Governing bodies of universities have remuneration committees to assess the right pay increase. Universities are very big businesses and principals' salaries remain modest compared with the private sector," he said.

"In comparison to academic salaries this year, the rises are not especially high."

A spokesman for St Andrews, where Dr Brian Lang received a 1% rise, said it was important to reflect the financial pressures facing the sector.

"We believe it is important to demonstrate constraint and for senior managers to lead by example when there is widespread restriction of pay increases, not just in higher education, but across the public sector," he said.

Other large increases were seen at Glasgow University, where Sir Muir Russell's salary jumped 8.5% to £205,000, and Strathclyde University, where Professor Andrew Hamnett's salary increased by 7.6% to £182,000.