Pulling the plug on a pot of cash set aside for strengthening Scotland's city regions will undo the progress of the past four years, the leader of the country's largest local authority has claimed.

Steven Purcell, leader of Labour-led Glasgow City Council, also said that following the reversal of the decision to relocate NHS jobs to the city and the redistribution of Scottish Enterprise jobs, the government owes it to Glasgow to continue the Cities Growth Fund.

However, opposition leaders have described the fund as resembling "a charitable handout" and said holding on to business rates would deliver better returns in the long run.

Since 2003 Glasgow has secured £76.5m from the fund, which is used for a range of projects to benefit the wider metropolitan area, from major infrastructure and capital projects through to training, with 25% of the money spent on schemes outside the city boundaries.

Projects funded include public realm works, 5000 places on vocational training courses, attracting new airline routes to Glasgow, new canal infrastructure in East and West Dunbartonshire, links from Paisley to Glasgow Airport and improvements to Glasgow's Merchant City.

Although the fund only runs to 2008 there had been expectations it would continue.

However, an evaluation of it in 2006, published in spring 2007 by GEN Consultants, criticised the lack of "iconic or visionary projects which would result in step changes in cities and their perceptions".

It concluded that small cities such as Stirling and Inverness did not receive enough to make a real difference and larger cities did not receive enough "to undertake step change, iconic projects".

The concern now is that a combination of the promise by John Swinney, Finance Secretary, to deliver a slimmer government and a public spending review which found that the fund, which is worth £42m across Scotland each year, should be wound up, will spell the end of it.

On Friday, Glasgow City Council is expected to ratify a plea to the government to continue with the fund until 2011.

Last night, Mr Purcell said: "The Cities Growth Fund has been an undoubted success, allowing Glasgow and the west of Scotland to invest in regeneration and jobs.

"Scotland's cities are the country's economic powerhouse. If these funds were reallocated away from the cities then the whole country's growth would be damaged."

But John Mason, leader of Glasgow's SNP group, said: "Keeping the business rates would provide even more money to fund development. Credit to Councillor Purcell and Charlie Gordon before him for the growth in the city.

"But we'd have even more funds for growth if we could keep the business rates. Keep the fund for now but in the long run we could have sustainable funding rather than charitable handouts."