ALEX Salmond's chief economic adviser is at the centre of a tax avoidance row after it emerged that his investment group's hedge fund is running businesses from a tax haven.

Sir George Mathewson, who heads the SNP government's council of economic advisers (CEA), is chairman of London-based Old Oak Holdings.

Old Oak is the holding company for Toscafund Asset Management LLP, which has several of its "mutual funds" registered in a Cayman Islands office block described by the US president, Barack Obama, as "the biggest tax scam in the world".

Four of the funds were registered in the Caymans after Mathewson, a former RBS chairman, took up his post with the government.

Andy Kerr, Labour's finance spokesman, said: "Here we have a short-selling, big-bonus-bragging, RBS-super-salaried, tax-avoiding adviser to the first minister. When will Salmond do the decent thing?"

Tax havens are estimated to cost the UK Treasury up to £33 billion a year in lost revenues. The Cayman Islands is attractive to companies as it does not levy tax on income, corporations or capital gains.

Glen Moreno, who was an economic adviser to the Westminster government, resigned his post last month after it emerged that he was formerly a trustee of a bank accused of involvement in tax avoidance.

Nine SNP MSPs - including chief whip Brian Adam - last year supported a motion in the Scottish parliament that welcomed proposals by Obama, who was then a senator, to clamp down on the havens, and which stated that "tax avoidance and evasion is inimical to tackling relative poverty".

Asked why Toscafund registered its funds in the Cayman Islands, Mathewson said: "There are all sorts of tactical reasons for that."

A spokesman for the first minister said: "Sir George is one of the most successful and respected businesspeople of his generation in Scotland, and we are delighted to have him as chairman of the CEA, which in any case is an unpaid role."

There is no suggestion that Mathewson is involved in any wrongdoing.