Education secretary Jenny Gilruth has confirmed up to £40 million funding in principle for the Scottish Funding Council (SFC) to support the University of Dundee’s recovery.

Funding will be provided to the SFC over two academic years or three financial years. This is in addition to the £25 million funding announced by Ministers in February for the SFC to support universities facing financial challenges, of which the University of Dundee received £22 million. This means total additional funding made available for the University by the Scottish Government via the SFC is up to £62 million.

The SFC and Scottish Government have said it will work together to develop appropriate conditions for the funding, which is subject to further due diligence, adding that funding will only be released once a sustainable, long-term recovery plan is put in place by the University that leverages commercial and private investment.

The statement follows Professor Pamela Gillies’ Independent Review into the University of Dundee’s finances, which highlighted that the University had failed to operate in line with the SFC’s Financial Memorandum and Code of Good Higher Education Governance – the damning report led interim principal of the University of Dundee, Professor Shane O’Neill to resign.

Ministers have held early discussions with SFC to consider options to strengthen governance in institutions.

Confirming the funding in a statement to Parliament, Gilruth said: “The Scottish Government is determined to do everything we can to secure a positive and thriving future for Dundee University.

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“Since issues at the University came to light in November, the thoughts of Ministers have continued to be with staff and students who have faced a period of real anxiety and uncertainty. This additional £40 million funding support will help return the university to the thriving institution it should be.

“Scotland’s universities are independent and autonomous institutions. In normal circumstances, decisions on the allocation of funding to individual institutions are the responsibility of the SFC. However, this is a unique and unprecedented set of circumstances, which requires a unique and unprecedented response.

“It is vitally important that the University works to secure a sustainable, long-term plan which will allow for commercial lending to support some, or all of the remaining liquidity ask. We will consider all avenues and other support we can provide to achieve that end.”