Moody's credit ratings agency lowered its assessment of the UK's creditworthiness from AAA to Aa1 on Friday, the first time the UK has been moved off the hallowed rating since 1978, and warned of several years of "sluggish" growth ahead.

Labour said the Chancellor had suffered a "humiliating blow", given he had made maintaining the AAA rating a cornerstone of Treasury policy. However, Osborne insisted the UK's credibility was intact.

The money – enough to pay the wages of 1100 nurses, teachers and police officers in every year since 2007 – was spent getting rid of 34,300 people from 180 public bodies, including the Government, councils, health boards, the police, colleges and universities, and 50 quangos. The average deal cost taxpayers £17,500.

The figures were obtained by Scottish Labour under Freedom of Information legislation.

And when the judges instead picked a design that Gordon Matheson strongly disliked, he scrapped the project in what the sources described as "a fit of pique".

Although the chairman of the judging panel was officially David Mackay, a partner in MBM Architects Barcelona, the Sunday Herald has been told by two sources that Matheson made it clear at the first meeting that he would be de facto chairman as he was council leader and the redesign was his brainchild, adding that public opposition would not affect the outcome.