The cash will be spent on "special protection areas" for the capercaillie amid concerns that less than 1,000 of the birds are currently left in the wild.

It is hoped the project will help bring the population up to the 5,000-mark by 2010.

European funding will meet half the costs with the rest being made up with cash from the Scottish Executive and other bodies.

Special protection areas have been set up

Some of the funds will be spent on developing a strategy for the bird's survival.

Much of it will eventually be deployed in all eight existing capercaillie "special protection areas" in Scotland.

The project will involve more than 30 private landowners and managers, as well as government bodies and quangos.

Deputy Environment Minister Allan Wilson said: "This is fantastic news for one of Scotland's most celebrated and endangered bird species, a species that is clearly identified with Scotland and with our wild and beautiful forest landscapes.

"To have secured almost £2.5m of additional European funding is a tremendous success, especially when barely one-third of eligible projects across the UK are approved."

Under European rules, member states have to take special measures to conserve the habitats of some rare species of birds.