LOTHIAN Buses is embroiled in a spying row over allegations of snooping on the emails of staff at Edinburgh Trams.

It is claimed an employee at the publicly-owned east coast bus company took screenshots of emails sent by managers at Edinburgh Trams, triggering two investigations and disciplinary action.

Nick Cook, a Conservative councillor in Edinburgh, said: “This is a very serious matter. I am not aware local councillors have any knowledge of this.”

Lothian Buses and the Edinburgh Trams are separate entities, but both are ultimately owned by the City of Edinburgh Council.

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However, although the companies are autonomous, they combine backroom functions such as IT and human resources.

The Sunday Herald has learned that a whistleblower came forward in early 2015 to allege that a Lothian Buses staffer had taken copies of emails sent by senior figures at the firm and at Edinburgh Trams.

It is understood that up to 1,500 screen-grabs may have been taken during the period of unauthorised surveillance.

Two probes are believed to have been carried out: an internal investigation by Lothian Buses; followed by an external examination carried out by a blue-chip accountancy firm.

An employee is said to have admitted the snooping and been given a warning by his employer.

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However, staff at Edinburgh Trams were only told months after the whistleblower came forward.

An insider said: “This scandal requires to be exposed to the wider public who of course remain the ultimate shareholders in this publicly owned company – something the Board and the Directors would do well to be reminded of.”

Although Edinburgh Trams and Lothian Buses work in partnership, there have long been rivalries between the two firms.

The city’s bus service is regarded as one of the UK’s finest and staff were fearful that the trams project, which was late and over-budget, could suck revenues away.

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Unite, the trade union that represents bus drivers, has also been vocal in speaking out against plans to extend the tram line to Leith.

In the past, it has also been reported that Edinburgh Trams was dissatisfied with elements of a shared services deal on IT.

Separately, Lothian Buses went through a well-documented boardroom war after a bitter falling out last year between the former chief executive and senior colleagues.

Cook added: “It is essential full transparency is provided for local members and the public.”

Nigel Bagshaw, a Scottish Green councillor in Edinburgh, said: "As a member of the Transport for Edinburgh board, I would hope to be notified about a breach of this kind, as it is a concern."

HeraldScotland: Trams in St Andrews Square, Edinburgh. Pictue: Gordon Terris

A spokesperson for Lothian Buses said: “An internal issue was raised over a year ago that was investigated and dealt with fully in line with our HR procedures. As part of this, actions were taken in respect of employee roles and responsibilities, and internal IT security protocol was strengthened in line with industry best practice standards.”

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A spokesperson for Edinburgh Trams said: “We are satisfied that this issue was fully dealt with at the time and now consider the matter closed.”

He added: "As far as the timing is concerned, all I can advise is that staff were informed at the appropriate time in the process and kept informed throughout."