Devon and Cornwall face losing millions of pounds of EU money after the Government decided to channel cash to Scotland in the battle to prevent independence.
The Scottish parliament has won a battle to ensure more of the Brussels "structural aid" given to the UK is pumped into the economy north of the border, rather than hard-pressed regions in England.
English regions will collectively lose £665 million over six years – a large chunk of which was destined for Devon and Cornwall as the areas remain among the poorest in the 27-nation bloc.
Critics argue the money should be going to areas in the UK that most need it, and point to official figures showing Scotland is much wealthier than Devon and Cornwall following decades of industrial decline in the Westcountry.
South West UKIP MEP William Dartmouth said: "This looks very alarming. Before we leave the European Union it is important the South West, and Cornwall in particular, gets its fair share, and that does not seem to be happening at the moment.
"EU structural funding is inefficient and wasteful, and is not doing what it should to support the poorest parts of our country."
Earlier this year, European leaders, including David Cameron, agreed a real-terms cut in EU spending, which includes the "structural aid" programme – money ring-fenced for the poorest regions to spend on projects to boost the economy. In Cornwall, previous rounds have paid for one of the fastest broadband connections in Europe, the development of Newquay Airport and the Combined Universities in Cornwall project.
As a result of the UK's allocation of structural aid being slashed, Scotland was poised to get 32% less between 2014 and 2020. But after protests from Edinburgh, the coalition Government has now agreed a 5% cut for each of the UK nations.
Vince Cable's Department for Business has admitted it has ignored new EU guidelines on where the money should be spent, meaning Scotland will receive a £193 million "uplift" compared to what it should have got. Including the "uplift" granted to Wales and Northern Ireland, England in turn will receive £665 million less.
Yet GDP per capita – the benchmark of economic wealth used to allocate funding – shows Scotland is far better off than the Westcountry. Scotland's GDP is 107% of the EU average, with north- eastern Scotland at 162%.
By contrast, Cornwall and the Isles of Scilly's GDP is 72% of the Europe-wide average: the most meagre of any region in England. Devon's is also a lowly 87%.
Cornwall and the Scillies is so poor the area is classified as just one of two "less-developed regions", and will get the biggest share of structural aid from next year once ministers decide on where it goes. The status is equivalent to current Convergence and previous Objective One and 5b funding received since the 1990s.
Devon is one of 11 "transition regions", and will get the second-highest level of support.
Scottish Secretary Michael Moore indicated Scotland's "uplift" was being used as a weapon ahead of next year's independence referendum, telling journalists north of the border: "By being in the UK, Scotland has not only got a better EU budget deal – we will also get better funding from Brussels."
Westcountry MPs have questioned how the money – around £8 billion across the whole of the UK – has been divided up.
Nick Harvey, Liberal Democrat MP for North Devon, said: "It should be done according to need. If we are losing out, that does not seem right. The Government needs to state clearly and on what basis it is allocating funding – and if not on a statistical basis, it should say why not."
George Eustice, Conservative MP for Camborne and Redruth, said: "Cornwall has 'Convergence' status because the facts show that it has a far greater need than other parts of the country.
"I think that the Government should prioritise regional support towards maximising the benefit of structural funds to Cornwall and to give business the boost it needs."
Downing Street has insisted the decision had "nothing to do with the Scottish independence referendum".