A Labour call for an extension of the First ScotRail franchise to be suspended has been rejected by the Scottish Government.
A Labour call for an extension of the First ScotRail franchise to be suspended has been rejected by the Scottish Government.
Labour transport spokesman Des McNulty called for the move after a critical report by watchdog body Audit Scotland. The report also led to the resignation of Guy Houston, finance director of the Transport Scotland quango.
Mr McNulty said the Scottish Government stood accused of doing a "secret deal" by awarding the contract extension without proper scrutiny or consultation.
"Scottish Labour and the trade unions warned in March that this was unacceptable. The award of this contract has been so badly handled that it should be suspended pending a full investigation."
Another Labour MSP, Cathy Peattie, has tabled a motion calling for a halt to the franchise extension, a Parliament inquiry, and for Transport Minister Stewart Stevenson to make a statement to MSPs.
A Scottish Government spokesman said: "Audit Scotland's review of the First ScotRail passenger franchise recognised the benefits the extension has secured for passengers and taxpayers."
The report, published on Friday, found First ScotRail had improved the quality of train services across the country since taking them over four years ago. But the extension of the contract until 2014 could have been handled better - including the governance arrangements for the review process, the report said.
A section of the report said Transport Scotland's register of interests indicated that its finance director held shares and share options in FirstGroup, and this interest was declared in Transport Scotland's annual report.
Mr Houston was present at key meetings in March at which the rail franchise extension was discussed, but the minutes did not note if he declared an interest or removed himself from discussions.
