A DEAL has been signed to turn whisky "leftovers" from a Scottish distillery into fuel for cars.

The Tullibardine distillery in Perthshire says the contract is first of its kind in the world.

The distillery, in Blackford, near Auchterarder, has linked up with a spin-out company – Celtic Renewables – founded by boffins at Napier University, Edinburgh.

They plan to use bacteria to feed on by-products in the early stages of the whisky making process. This will produce butanol that can be used to fuel vehicles.

Tullibardine distillery spends £250,000 disposing of by-products every year.

Celtic Renewables said it eventually aimed to build a processing plant in Scotland, with the hope of creating an industry that could be worth £60m a year.