FUNDING chiefs are to scrutinise the suspension of the principal of a newly merged college in Scotland's largest city.

The Scottish Funding Council (SFC) is to hold an immediate review of the decision to take disciplinary action against Susan Walsh by the board of Glasgow Clyde College.

Mrs Walsh, who was awarded an OBE last year for services to education, was suspended on full pay following a meeting of the college board last month amid concerns over her style of management.

College unions were said to have been reluctant to take part in a survey of staff opinion about the running of the institution unless it went straight to the board.

However, students later held a vote of no confidence in George Chalmers, chairman of the board, over his handling of the issue.

NUS Scotland said there was concern student board members were asked to leave the board meeting during the discussion when they should be treated as full board members under the new Code of Good Governance for the sector.

The SFC review will look at "matters relating to the governance and management" of Clyde College and will be undertaken by multinational law firm DLA Piper, which has experience of similar reviews within the college sector.

The review will look at the way the suspension of the principal was handled and whether human resources policies and procedures at the college were followed.

It will also look at actions of the college board denying involvement of student members in the meeting to decide Mrs Walsh's future.

Laurence Howells, SFC chief executive, said: "Everyone who benefits from the work colleges across Scotland needs to know they are run in the best possible way and with the interests of students at the centre of what they do.

"This review is important to make sure the Glasgow Clyde College Board has met the high standards expected of it. I am confident that DLA Piper will produce a fair and thorough report."

A spokesman for Glasgow Clyde College board said members were not convinced of the need for a review and proposed terms of reference were still under discussion.

He added: "We have questioned the necessity of the review as we believe the board and the chair have acted properly throughout.

"One of the strands of the proposed review is to look at the new Code of Good Governance for Scotland's colleges and, in particular, the involvement of student board members in all board decisions, an issue which is important for all colleges in Scotland."

No official reason for Mrs Walsh's suspension has ever been given, although she was said to have clashed with former First Minister Henry McLeish, powerful chairman of the over-arching Glasgow Colleges Regional Board.

However, a recent Education Scotland report into the running of Clyde praised the leadership of Mrs Walsh, who was appointed principal of the college in 2013.

The intervention by the SFC comes just days after officials from the organisation launched an outspoken attack on the running of the Glasgow Colleges Regional Board.

The board should have been in a position to take over the administration of the £80 million total funding for Glasgow's three colleges in April, but the SFC said it was "far from ready". As a result the SFC want to parachute its own official into the organisation.

An SFC spokesman said: "The board is far from ready to be in a position to fund the city's colleges, one of its core functions, and SFC naturally needs assurance on certain key governance criteria."

A board spokesman hit back arguing significant progress had been made and raising concerns about the actions of the SFC.

He said: "The inferences made by the SFC are inaccurate and distorted and bear no relationship to what the board has achieved."