More than 100 broadcasting jobs will be created as a result of expansion at BBC Scotland, Sir Robert Smith, the BBC National Governor for Scotland, said yesterday.

Speaking at the launch of its annual review, he said an increase of UKP14m over the next two years would prove a major boost for home-based drama, entertainment and children's programming. "We reckon that will bring in something like 100 jobs to Scotland," he said.

In addition, a further UKP20m had been earmarked in the development plan for network commissions north of the border.

Sir Robert said this would see income rise from UKP94m in 1998 to an estimated UKP160m for 2002-3, in what amounted to the biggest single editorial expansion in the history of BBC Scotland.

"We have got the creative talent and we have got the resources so now we can produce the programmes," he said.

His comments come amid criticism of Greg Dyke, the director general, for receiving a UKP91,000 salary bonus while BBC1 dropped 1.6% in the ratings, and increasing concerns about BBC comedy and live sport output.

The Scottish review says BBC 1 in Scotland needs to "enhance performance". Sir Robert said standards would have to be high to secure the network money, but Scotland's track record was good, particularly in the light of the success of programmes like Monarch of the Glen, now shooting its third series, and Chewin' the Fat.

He said relationships between Scotland and London had improved markedly in the last two years following the turmoil of the late 1990s, and major rows involving the Broadcasting Council for Scotland and BBC UK managers over issues like the Scottish Six news bulletin.

At that stage, Scotland's share of the overall budget amounted to less than 5% and there was severe disquiet about Scottish programmes being squeezed out of the UK schedules.

"When I arrived here, there was still a fear around about that we were being crowded out. If it was the case then, I don't know, but I don't think there is any evidence of that now. We are getting a very fair share of programmes and network opportunities."

Asked about the relationship between Scotland and the UK, he said: "It wasn't healthy then, that's true. Clearly, there had been some sort of bruising time. I certainly cannot take personal credit for it, but I can tell you the relationship is a much more collegiate relationship than it was two years ago.

"That doesn't mean we have gone soft in Scotland and it doesn't mean that London has gone soft either. Greg Dyke is a very open operator and the reception given to the Broadcasting Council [for Scotland] has been very fair."

Sir Robert said independent productions would also benefit from an increased income for BBC Scotland, which now formed a greater proportion of overall BBC spending.

"It has risen faster than total BBC income and spend in real and significant terms," he added.

There had also been developments in broadcasting centres - a new building at Beechgrove in Aberdeen opened last year and Edinburgh will soon transfer from Queen Street to the Tun building next to Holyrood.

Sir Robert said the new headquarters building at Pacific Quay, due to open in 2004, would be of major benefit to Glasgow and Scotland.

The review shows the last financial year witnessed a drop of UKP1.7m in television and radio income. John McCormick, controller of BBC Scotland, said too much should not be read into one year's figures, particularly when £10m had been added in 1999 at the time of devolution, since consolidated into news and current affairs budgets.

He said that had been the biggest single investment in news and current affairs, and the identified need now was to boost drama and entertainment.

Mr McCormick defended the Newsnight Scotland opt-out, which he said had brought something new into journalism: a daily analysis of Scottish public life and interrogation of its leading figures.

"We are pretty clear that it has added to the quality of news and it is now a secure part of our output. I think we would have a problem now with our audience if we took it away," he said.