The latest Strategic Transport Projects Review outlines transport priorities over the next 20 years.
The review sets out aims to decrease C02 emissions, reduce car usage and encourage a shift to rail travel, other public transport and active travel.
But the report does not give unequivocal backing to the Borders Railway extension, merely expressing commitment to continue working with the Borderlands partners towards feasibility work on an extension.
Mr McAteer said: "The Scottish Government has very cynically and deliberately chosen to dismiss the extension of the Borders railway from Tweedbank to Hawick, Newcastleton and on to Carlisle through their failure to recommend this action in their recently published Strategic Transport Projects Review 2 (STRP2).
"This review sets the 20 year vision for transport in Scotland and this omission has been made despite the valiant efforts of the Campaign for Borders Railway and many local Borders communities, including Newcastleton, who were relying on some positive news to secure their future.
"It is even more incredible given the Scottish Government's apparent token support for a feasibility study, the results of which appear to have been already decided.
"The southern Borders deserve much better than this from their elected government and I hope that Scottish Borders Council will take a lead in making our anger and frustration known."
A spokesperson for the Campaign for Borders Rail described the new review as "somewhat disappointing", adding: "The Borders Railway is mentioned on page 160 of the technical report, where a commitment to working with the Borderlands partners to progress feasibility work on the Borders Railway extension is noted."
Meanwhile, the Borderlands Partnership Board has welcomed the government's commitment to the feasibility study, a spokesperson saying it "demonstrates the impact of the partnership's activities to promote the scheme."
However, Councillor Elaine Murray, leader of Dumfries and Galloway Council and Borderlands co-chair, called on the rail extension to be treated as a "national priority".
She added: "Whilst we welcome the inclusion of the Borders Railway extension in the findings of STPR2, we do believe this should be considered a national priority due to its potential benefits, and we will continue to make the case strongly to both governments as we take the next steps towards a feasibility study."