THE Lite-On job losses highlight growing fears that the Government is spending too much money attracting firms to Scotland which takes away work from companies that are already here, writes Ken Smith.

Clairemont Electronics in Greenock made computer monitors for IBM for eight years, then lost the contract. It rapidly had to find new markets abroad, but was aware that Lite-On's arrival, with millions of pounds of Government aid, was making it more difficult for it to compete.

Until then Clairemont had the advantage in Scotland in that it could supply monitors more quickly than competitors from abroad. With Lite-On's arrival that supply lead-time was lost, as was Clairemont's competitive advantage.

Similar concerns were expressed this week by Fullarton Computer Industries, which has factories in Ayrshire and Renfrewshire. Managing director Allan McLuckie was dismayed to read of the Taiwanese company, Hon Hai, setting up a subsidiary in Renfrew, called Foxteq, which would create 560 jobs by building computer enclosures - the metal box which contains the circuit boards, drives, and memory of a computer.

It is in this field that Fullarton has already made its name, and Mr McLuckie fears that the Government is simply giving money to a foreign firm which will ultimately take jobs away from indigenous companies.

Scottish Industry Minister Brian Wilson assured Mr McLuckie that Hon Hai was not being paid any Regional Selective Assistance to set up in Renfrew. But what the Minister did not make clear is that Hon Hai will be paid taxpayers' money to help with training costs, which is a growing part of company expenditure in the high-tech field.

Locate in Scotland argues that the enclosures that Hon Hai will make in Erskine are simply substituting enclosures currently being made by the company in China.

However, Mr McLuckie said that, while that may be true initially, there was nothing to stop Hon Hai from expanding from that base and ultimately taking work, and therefore jobs, away from FCI.

Business insiders say that part of the problem may be that Locate in Scotland is driven by the need to come up with ''quick fixes'' of jobs won from abroad in order to present the Government in a favourable light by detailing large numbers of jobs created.

At Clairemont, managing director William Sanderson fears that the partnership between industry and Government is not as close as it should be, and suggests greater help for Scottish companies which can go on to establish their own business subsidiaries.

''It is time to open dialogue and review the support policies and criteria for allocation of any public funds, and how we can maximise the potential for success from this type of support,'' he argued.