'.—(1) The Secretary of State may pay to the Funding Council in respect of any expenditure incurred or to be incurred by them in connection with their functions under or by virtue of this Part of this Act grants or other payments of such amounts as he may determine.
(2) A grant or other payment paid under this section may be made subject to such conditions as the Secretary of State thinks appropriate and such conditions—
(3) The terms and conditions on which the Secretary of State may make any grants or other payments under this section may include in particular conditions—
but shall not relate to the application by the Funding Council of any sums derived otherwise than from the Secretary of State.
(4) A condition imposed in pursuance of subsection (2) above shall not have effect as regards anything done, or omitted to have been done, before the date the condition was imposed.—[Mr. Michael Forsyth.]