Alex Salmond has said councillors in Edinburgh were right to scrap plans to close 22 schools and nurseries across the city.
The first minister made the comment after SNP members withdrew their support on Monday for the closure plan.
The Liberal Democrat/SNP run council had agreed to close the schools in a bid to save £9m over three years.
Council leader Jenny Dawe said the move could now result in her party forming a minority administration.
Mr Salmond described the original plan to close the schools as not being well thought through.
He made his views known as he launched a new university entrepreneurship scheme with Sir Tom Hunter.
The billionaire, who has pledged £750,000 to schools in the city, including two of those earmarked for closure, said he too was pleased by the council's rethink.
Consultation process
Ms Dawe told BBC Scotland there was "shock and disappointment" among her party colleagues over the SNP's actions.
She said: "They did not inform us they were withdrawing their support from the programme.
"Up until a few days before that we had their full support.
"Everybody knew it was going to be an extremely difficult exercise that we were embarking on, but we had not even started the formal part of the consultation."
"They did not inform us they were withdrawing their support from the programme"
The Lib Dems group, which is the largest on the council, held an emergency meeting to discuss the situation on Monday night.
Ms Dawe added: "Up until now the coalition has worked, I think, very well.
"This was a breach of the agreement we had.
"It may well be that what we now have to do is to look again at how we get over the fact that the education of the children in our city could be better, there are many children who are in schools that are below 60% occupancy, some below 30% occupancy.
"Clearly it's not an issue that's going to go away."
Labour, which controlled the council until the elections in May, had looked at shutting a raft of schools.
The council's balance of power shifted after the election when Labour representation on the council was reduced from 30 to 15 councillors.
The Lib Dems won 17 seats while the SNP gained 12, the Conservatives 11 and the Greens three.
A report will now go before the next full council meeting later this month to terminate the consultation process formally.
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