A FORMER deputy first minister has turned a record £110,000 profit from selling his publicly funded second home, the Sunday Herald can reveal.

Ex-Aberdeen South MSP Nicol Stephen, now the LibDem peer Baron Stephen of Lower Deeside, sold the house for £303,000 last month after almost a decade of billing taxpayers for running costs.

Stephen bought the two-bedroom lower villa in the desirable Morningside area for £193,333 in February 2002, using a deposit of just £31,533.

He then claimed more than £70,000 in parliamentary allowances on the property until May 2011, when he stood down from the Scottish Parliament.

During the nine years he owned the flat, Stephen claimed more than £50,000 from the public purse for the interest payments on his Bank of Scotland mortgage, and almost £20,000 for council tax, TV licence fees, insurance and utility bills.

The gross profit of £109,667, which is expected to be subject to capital gains tax, is the largest yet bagged by an MSP or former MSP.

Until Stephen's sale, the record had been held by SNP Infrastructure Secretary, Alex Neil.

He made £105,505 before tax in 2010 by selling a flat bought with a deposit of just £4720 but maintained with £87,000 of taxpayers' money.

There were calls last night for Stephen to give his overall profit, estimated at about £85,000 after capital gains tax, back to the taxpayer.

In 2006, Stephen was found guilty of breaking allowance rules after an "error" that meant he claimed mortgage interest on the basis of misleading paperwork lodged with the Parliament.

When Stephen bought his flat, Holyrood had recently changed the rules on Edinburgh Accommodation Allowance (EAA) so that MSPs could only claim interest for mortgages in their names alone, not for joint mortgages. Stephen had a joint mortgage with his wife, Caris Doig, a tax expert.

In March 2003, he presented the allowances office with a document showing his as the only name on the mortgage papers, a mistake he later blamed on his bank.

After the Sunday Herald exposed the discrepancy, the Parliament ruled Stephen had "failed to follow the guidelines" for the allowance scheme, but said neither he nor his wife gained from the error.

The bulk of Stephen's claims were made under the now-discredited EAA scheme, which paid for MSPs to stay overnight in the capital.

Although some stayed in hotels or rented flats, many bought second homes and claimed the mortgage interest on their expenses.

Following an outcry about MSPs playing the property market, mortgage interest claims were stopped, and since May last year MSPs have only been able to claim for rent or hotel costs.

Stephen, 52, who was leader of the Scottish LibDems from June 2005 to July 2008, and deputy first minister from June 2005 to May 2007, is the latest in a long line of MSPs to profit from selling their second homes.

Last August, Finance Secretary John Swinney made a pre-tax profit of £75,000 from his four-bedroom second home in Morningside after claiming £70,000 in expenses to live there over seven years.

Other EAA recipients include former LibDem deputy first minister Jim Wallace, who made £69,400 before tax; Tory MSP Alex Johnstone (£60,000); SNP MSP Gil Paterson (£50,000); and former SNP homelessness minister Stewart Maxwell (£34,500).

The sales have sparked a Facebook campaign called Give the Money Back, urging MSPs to return the profits.

Green MSP Patrick Harvie said: "This flawed scheme came to end last year but all MSPs who've made a profit on the back of Scottish taxpayers must do the decent thing and hand back the cash. The public will have no sympathy for politicians seen on board any gravy train at a time when housing benefits and the housing budget are being cut."

Stephen did not return the Sunday Herald's calls.

A LibDem spokesman said: "Of course, capital gains tax will be paid on the transaction in full as appropriate."