NICOLA Sturgeon has been drawn into the cronyism row over T in the Park, after the Liberal Democrats demanded she investigate the matter under the ministerial code.

The First Minister was asked to establish if Culture Secretary Fiona Hyslop broke the code by awarding £150,000 of public money to the festival after an intervention by an ex-SNP aide.

Scottish LibDem leader Willie Rennie described the matter as “deeply unsettling” as “any indication of cronyism degrades integrity in government”.

He said: “This matter must be treated with the gravity it deserves”.

An inquiry would force Ms Sturgeon, who as First Minister enforces the code of conduct, to take a position on the probity - or otherwise - of two long-standing SNP colleagues.

It emerged last week how Jennifer Dempsie, a former SNP government adviser, had set up a key meeting between Ms Hyslop and T in the Park’s promoters, DF Concerts.

The partner of SNP Westminster leader Angus Robertson, Ms Dempsie was working on a short-term contract for DF Concerts as a project manager on the festival.

She contacted Ms Hyslop’s private office on May 14, and the Cabinet Secretary met DF Concerts boss Geoff Ellis on May 28, where he flagged up unexpected cost pressures.

DF Concerts subsequently applied for aid on June 29, and Ms Hyslop signed off an “ad hoc state aid” package on July 2, just eight days before the festival began.

The £150,000 was justified as help to relocate the event from Fife to Strathallan in Perthshire.

However the award was only made public a fortnight after the three-day festival was over.

Its disclosure prompted criticism and accusations of cronyism given Ms Dempsie’s SNP links and DF Concerts’ record of commercial success - the firm is 78 per cent owned by London-based LN-Gaiety Holdings Ltd, which last year had a pre-tax profit of £9 million.

Former SNP leader Gordon Wilson said Ms Dempsie, who worked for then First Minister Alex Salmond from 2007 to 2009 and hopes to become a Highlands and Islands list MSP in 2016, had “personally lost credibility” and that the SNP’s reputation was also at risk.

Under the ministerial code, ministers “must act and take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias”.

In his letter to Ms Sturgeon, Mr Rennie said: “We need to know that any abuse of power will not be tolerated by the Scottish Government. That is why I am asking you to investigate whether the Culture Secretary broke the ministerial code in this deal.

“The Scottish Government must commit to an open investigation into these damaging revelations if we are to have confidence that that this arrangement was undertaken with the same scrutiny afforded to a small business or social enterprise applying for state aid.

“I am sure you will agree that at the very least, people deserve for their government to be fully transparent on how such funds are distributed.”

A spokesman for Ms Sturgeon said: “We will respond to any letter from Mr Rennie once we receive it. As we have already made clear, the awarding of this funding followed normal procedures and as such the ministerial code was adhered to at all times.”

According to a new parliamentary answer obtained by local Conservative MSP Liz Smith, DF Concerts “outlined a range of additional costs” on May 28 relating to the move to Strathallan.

There were also “unanticipated further costs” resulting from Perth & Kinross Council limiting planning permission to 2015, 2016 and 2017, with an impact assessment thereafter.

DF Concerts confirmed this year’s event “could be delivered under pressure” but the additional costs it faced were “a threat to its longer term viability”, the government said.