Entrepreneurial Spark chief executive Jim Duffy withdrew as an assessor from the sifting phase of the Scottish Edge awards after it emerged that a majority of the winners had links to his organisation.
However, he made a comeback days later after the Scottish Government and its business quango intervened.
Run by Scottish Enterprise (SE), the awards scheme allows fledgling companies to compete for cash prizes. Although the awards have been welcomed by business, controversy has dogged the way they are run.
Earlier this year, 217 applications were whittled down by an expert panel, including Duffy, to 60. The panel then selected 30 businesses to pitch for funding at the final in June.
Over 50% of the finalists were under the wing of ESpark, a taxpayer-funded organisation led by Duffy to mentor entrepreneurs.
Duffy was not on the final judging panel, but 16 of the 18 prizes - worth nearly 90% of the £704,000 on offer - went to start-ups linked to ESpark.
His role on the initial assessors' panel prompted complaints to Scottish Enterprise and sparked a debate with Government officials.
In one email, a Scottish Enterprise staffer said of the complaints: "This need [sic] to be taken into account in deciding how we take this fund forward ... it is extremely difficult ... to try to respond with a positive spin and with some recent twitter activity on this topic the subject isn't likely to go away any time soon."
A summit on the issue also considered the "strong external perception of conflict relating to ESpark's part in assessments".
Weeks later, Duffy quit as a panellist from the sifting phase. He wrote: "I've had a wee think about the Edge and the direction it is going in at present ... I have decided to withdraw from the sifting phase this time around."
However, the Government and SE "collectively agreed" that ESpark should be on the initial panel for the next Edge awards.
At the latest awards ceremony, last month, ESpark "chiclets" repeated their success, with 14 of the 30 start-ups in the final having a connection with ESpark.
Duffy played no role in the final judging, which saw 21 winners walk away with a share of £698,000. Eight of the 21 were linked to ESpark.
Saul Page, whose Go Army venture did not make the final, said the process had shown "total contempt for public concern".
Scottish Tory enterprise spokesman Murdo Fraser said: "We need to know why, having quit as a judge, Mr Duffy was reinstated, and why SE believe it was appropriate for him to continue in this role."
Eleanor Mitchell of Scottish Enterprise said: "It was collectively agreed that there was a robust selection process in place and no individual had the ability to influence any decision. Partners felt strongly that Mr Duffy's input and involvement was a valuable asset and we agreed he would continue to support the process."
ESpark did not respond to requests for comment.