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The Scottish Office is proposing a merger of its education and industry departments as part of a national review of the civil service.

The move would underline the widespread belief that education and training are both critically linked to Scotland's economic development, a view which was recently stressed in the Scottish Higher Education Funding Council's submission to the Government's higher education review.

Senior management is currently under review in all Government departments, but while departmental mergers in England would need parliamentary authority, they can be achieved as internal administration within the Scottish Office.

The proposals, sent to staff this week for consultation, envisage shedding about 15 per cent of senior Scottish Office staff overall. But the new education and industry department is virtually unscathed.

The Scottish Office report says bringing together industry and education "would create a large, but just manageable command", adding that the link between the two was widely supported by outside organisations during initial consultations.

Academic and vocational education are already to be merged in a modularised school examination system.