Mr Mackay says: "We propose to invest over £1.6 billion in higher and further education, continuing the provision of free education, and maintaining 116,000 full time college places."

He says the budget maintains the £50m Attainment Scotland Fund and provides a further £120 million to go directly to schools, to be used at the discretion of schools and teachers to close the attainment gap.

The minister says the package of measures places equality of opportunity at the heart of this government’s approach to Scotland’s economy.

The minister says he proposes to reduce the Business Rates Poundage, expand the Small Business Bonus Scheme, so that it lifts 100,000 properties out of rates altogether, and expand rural and renewables reliefs.

Mr Mackay says the budget will help address climate change.

Mr Mackay says his Budget proposals are underpinned by the principle that tax should be proportionate to the ability to pay, and he proposes to protect low and middle income taxpayers, at a time of rising inflation, by freezing the Basic Rate of Income Tax. 

The finance secretary says, unlike the UK Government, he proposes not to give a real-terms tax cut for higher rate (40 pence) taxpayers.

Mr Mackay says: "The government’s budget plans are focused on stabilising and growing our economy, empowering our communities, protecting our environment, promoting equality and improving our public services."

Mr Mackay says this is "a test of our maturity as a parliament".

He says his plans will be supported, for the first time, by income tax proposals made under the powers devolved to us through the Scotland Act 2016.

Finance Secretary Derek Mackay says: "I am delighted to lead this debate on the principles of the Budget Bill for 2017/18."

Image source, Getty Images

Finance Secretary Derek Mackay will now lead a debate on the draft budget for 2017-18.

Mr Mackay had said he was "confident" of finding "common ground" to get his proposals passed. After the deal was confirmed, he said it was "good news for the economy, taxpayers, communities and public services".

The budget was a strong theme at First Minister's Questions.

Nicola Sturgeon said her priority was not to cut taxes for the top 10% earning Scottish taxpayers. However, Scottish Conservative leader Ruth Davidson accused Ms Sturgeon of setting out to make Scotland the highest taxed part of the UK.

Image source, PA

Members will debate the draft budget before voting on whether they agree to the general principles set out in the bill.

Previous votes on the budget proposals and on taxation had failed to find any consensus between the parties.

A deal with the Greens appeared likely after co-convener Patrick Harvie said he was "not willing" to see emergency cuts to services in the event of the budget not passing.

Mr Mackay had been holding detailed negotiations with the Greens and Lib Dems, having all but ruled out a deal with the Conservatives or Labour.

He said he was confident that the budget, external, which is of "huge importance to Scotland", would be agreed.

The SNP and Greens have struck a deal ahead of the first vote on the Scottish budget, it has been confirmed.

With the SNP a minority government, Finance Secretary Derek Mackay has held talks with opposition groups in a bid to win backing for his plans.

Image source, BBC/PA

It is understood the Scottish Greens have done a deal based on changes to the threshold for the 40p rate of tax.

The agreement is also understood to increase the level of spending on local government services by about £160m.

The Greens targeted changes to tax as well as more spending for public services.

Co-convener Patrick Harvie said his party was "making a strong case" to use Holyrood's tax powers to protect public spending.

He too raised the budget at First Minister's Questions.

Mr Harvie said: "Isn't it clear that even if we do see this afternoon a Budget concession restoring significant funding to protect local services in every part of Scotland that that was not only essential but it should also mark the beginning of a new approach, one in which we invest not only resources but local control back into the hands of our communities."

He went on to urge the first minister to ensure that fiscal policy setting in the Scottish Parliament must be a "living debate", able to respond to events such as the vote for Brexit.

Labour's Neil Bibby says he welcomes the announcement from the government to look at ferry service procurement, and asks for the minister to extend the current contract of workers on the Gourock to Dunoon service.

He aslso asks for assurances that there will be continutity of employment and conditions of the workforce on that route whatever the outcome of the review

The minister responds that the rights of workers and collective bargaining will continue regardless of the outcome of the review. 

Tory MSP Liam Kerr says there will be genuine concern about the preference of the government for in house ferry services.

Mr Kerr asks if it is possible to use the Teckal exemption will that be an end of competitive tendering for ferry services.

Mr Yousaf says communities will be at the heart of what is being done and he is keen not to prejudge the outcome of the review.

The minister says that he has concluded that a policy review should be conducted to identify the legal policy and financial implications of the procurement of ferry services. 

Mr Yousaf says the Scottish government aims to ensure that ferry services are affordable, sustainable and provide confidence to ferry users and staff going forward.

Image source, bbc

Mr Yousaf announces a pause in current tendering of the Gourock to Dunoon tendering exercise.

He says the safe delivery of ferry services will continue and his priority is continuity. 

Mr Yousaf says tendering must satisfy EU regulations and state aid rules.

The transport and islands minister says he is confident all the EU rules are being met on ferry service contracts.

Image source, bbc

He says the award to CalMac followed these rules.

The minister says it is important that tendering and procurement issues are considered.

He cites the Teckal exemption and Hamburg exemptions under the Public Contract Regulations 2015 (PCRs 2015)