Easing restrictions in Edinburgh would have posed a “significant risk” of the virus running out of control again, the first minister has insisted.
Council leaders say they were told the capital was likely to move from level three to level two this week.
But Nicola Sturgeon announced on Tuesday that it would instead be remaining in level three.
Ms Sturgeon said the data suggested it would not be safe or sensible to ease the restrictions.
The first minister was speaking as she faced questions in the Scottish Parliament over the controversial decision, which has sparked anger from many politicians and businesses in Edinburgh.
Scottish Labour leader Richard Leonard said the city council had been told by officials from Public Health Scotland and the National Incident Management Team that Edinburgh should be downgraded to level two.
He said Edinburgh was “well within” the level two thresholds, adding: “If you look at the five indicators that were published on Tuesday, one stayed at moderate, three remained at low and one was moved from law to very low.
“So why was Edinburgh treated in this way?”
Mr Leonard said the issue was also about public trust in the decision-making process, adding: “The government too often appears to assume that people will act in an irresponsible way, and that assumption is bringing businesses in Edinburgh and across the country to breaking point.
“The five-tier system was supposed to give people and businesses certainty and clarity but we are seeing a return to arbitrary and ad hoc decision making.”
Ms Sturgeon said the number of cases per 100,000 in the city had gone up by 14% over the past week, and test positivity by 0.5%.
And she said test positivity had increased in five of the past seven days, and case levels in four of the past seven.
The first minister added: “If you have a situation where you have in any area case numbers rising slightly, or not declining significantly enough, then there is a real risk in easing restrictions.
“The danger is the situation runs very quickly out of control, and the judgement the Cabinet reached was that to take Edinburgh down a level at this stage would have posed a significant risk to the overall situation – which is why we didn’t do it.”
Ms Sturgeon said she understood the impact on businesses of remaining in level three, but said people in Edinburgh “deserve a government that will take decisions to try to keep them safe”.
And she asked: “Why on earth would I want to keep Edinburgh, or any part of the country, in a higher level of protection when I didn’t think there was a need to do that?”
Council leader Adam McVey, who also leads the authority’s SNP group, said on Wednesday that he was “extremely disappointed” by the decision, which he said would make the “dire” situation for local businesses even worse in the lead up to Christmas.
He added: “Our numbers are stable and have now been consistently within the rates of level two for some time.
“I’ve been strongly pressing for Edinburgh’s case to move to a lower level of restrictions when safe to do so. The data suggests that time should have been now.”
And Cammy Day, the leader of the council’s Labour group, questioned why Edinburgh was being kept in level three when it had lower numbers of cases than some level two areas.
Edinburgh’s case numbers began to rise fast in the second half of September and peaked at about 160 weekly cases per 100,000 people at the beginning of October.
However, by the time the Covid levels system was introduced on 2 November, the rate had declined to about half that and well below the level three threshold rate of 150.
It has since gone below the level two threshold, though the figure was rising slightly at the end of last week.
The Scottish government also considers the percentage of tests coming back positive when judging what level a local authority should be in, and Edinburgh’s “positivity rate” has been lower than the Scotland-wide rate since mid-October.
According to the latest Scottish government evidence paper, the number of Covid-19 patients is forecast to rise in the coming weeks, but not to go above capacity.