Scottish Borders Council, which secured planning permission for the new Kelso High School in October 2014, had hoped to start work on the project this summer.

However the European ruling means schemes which have been given investment through the Scottish Futures Trust (SFT) and were previously treated as private sector projects must now be considered as being public sector funded.

UK Treasury rules provide that government money has to be put aside to deal with the cost of public schemes and may only be released upon completion.

The SFT’s Schools for the Future programme is fully funding the new school at Nethershot on Angraflat Road which will include new grass and synthetic sports pitches as well as community facilities.

The local authority said that while progress continued to be made, construction work was now “likely to be delayed” until 2016.

It added: “Discussions continue between the Scottish Futures Trust and the Office of National Statistics to resolve the issue. We are being kept informed of the progress of these discussions and will continue to update the Kelso community on the project as it progresses.”

Last week it was revealed that a number of capital projects under the Hub programme run by SFT cannot reach financial close until EU statisticians complete a review into the classification of the Aberdeen Western Peripheral Route (AWPR).

The Office of National Statistics (ONS), which is reviewing the classification of the AWPR as well as the Dumfries and Galloway Royal Infirmary (DGRI) and the Edinburgh Royal Hospital for Sick Children, has asked Eurostat to look at a number of issues raised by their investigation.