Just two months ago, the Scottish Government's decision to allocate £50 million to upgrade the rolling stock on the sleeper service between London and Scotland was widely welcomed.

This was not only because it showed a commitment to an overnight cross-Border rail service but also because it was evidence of a willingness to work in partnership with the Westminster Coalition.

The UK Treasury had offered a £50m contribution to upgrading the sleeper contingent on this being matched by the Scottish Government. The revelation in The Herald today that the Scottish Finance Secretary John Swinney has rerouted this £50m to enable Scottish water to accelerate capital expenditure must raise questions about the future of the sleeper service.

A high-profile campaign to save the Caledonian Sleeper was launched at the end of last year when a public consultation on the future of rail services posed a number of radical options including removing either the Highland or Lowland service or running the Lowland service only to Edinburgh.

At present it costs £21m, excluding track access costs, to provide the sleeper service. It has seen a 31% increase in passenger numbers over the last five years but is facing increasing competition from shorter journey times for daytime services and new sleeper bus services. However, research has shown that improving the facilities on sleeper trains and the booking system is likely to increase demand. In that case the £100m to upgrade the rolling stock would be a valuable investment to ensure the railway provides a viable alternative to air travel between Scotland and London, helping to reduce CO2 emissions.

Water infrastructure is essential and £50m worth of improvements is likely to be of direct benefit to more people than travel on the sleeper trains. At a time when public spending is under extreme pressure, however, the public is entitled to know how long the short-term loan of the £50m to Scottish Water is likely to delay the improvements to the sleeper carriages and whether that will put at risk the UK Government's £50m contribution which was ring-fenced for the overnight rail service in the Autumn Statement last November.

Without improvements such as reducing noise levels and providing temperature control, passengers subjected to what Scotland's senior civil servant, Sir Peter Housden, describes as "shrieks and lurches and terrible scraping across the track" will vote with their feet. If the sleeper service is lost, it will damage transport connections between Scotland and London and also remove one of the most attractive travel options for tourists who can journey overnight from the centre of London to breakfast in the Highlands. Having committed £50m to the project, the Scottish Government must now explain when the sleeper service will receive the money.