William Roe, chair of Highlands and Islands Enterprise (HIE) welcomed John Swinney's announcement this afternoon.

He said: "This endorsement of HIE's work is particularly encouraging given the Scottish Government's ambitious plans for building sustainable growth."

"Initiating some changes to our operation but retaining the core format through which we have delivered our results, provides us with a sound platform for future performance.

"We are delighted to be able to reassure our staff that there will be no compulsory redundancies as a result of these changes.

"Local enterprise company boards will be removed from March 2008 and we take this opportunity to thank serving members, and those who have served in the past, for their valuable and voluntary contribution to Highlands and Islands Enterprise. We hope they will still continue to contribute in the future.

"HIE's aim is to increase engagement to at least 500 business and community leaders under the new arrangements. Its proposals include the use of panels and web-based approaches to achieve region-wide participation in development issues; working with local authorities to transform the impact of community planning; strengthening its relationships with trade associations and representative bodies and engaging the voices of larger companies and their senior managers.

He continued: "The changes are consistent with the increasing unification of HIE's approach in the region. We will continue to be a highly decentralised organisation with staff working in the region's communities.

"We also intend to slim the number of our HIE board members from 12 to eight from the new financial year, which we believe will fit well with the Scottish Government's ambition for a more streamlined approach."

Sandy Cumming, HIE chief executive said: "John Swinney's announcement recognises the importance of HIE's experience and commitment to the special challenges of this dispersed region. The spectacular progress achieved by HIE's unique strengthening communities remit will continue to contribute to the success story of the Highlands and Islands.

"I particularly welcome the inauguration of a national strategic enterprise forum and the opportunity this will give us to contribute to discussions on the direction of the national economy at the highest level."