Nationalist Kenneth Gibson, left, backed a plan to build homes on SNP candidate Billy McLaren’s seaside hotel in Arran. However, Gibson did not inform North Ayrshire Council at the time of his written intervention that he was renting a four-bedroom house from McLaren for an undisclosed sum.

The MSP has also claimed around £1300 of public money for staying in his friend’s hotel on parliamentary business. The row follows an application to build 24 flats on the McLaren Hotel beside the Brodick seafront. Although 12 units of affordable housing were to be provided as part of the development, the plan was met with fierce local resistance.

However, one staunch supporter of the plan was Gibson, the MSP for Cunninghame North. In a letter to North Ayrshire Council in August 2007, Gibson backed the housing project and cautioned against any reduction in the number of homes: “Should numbers fall below this [24], the viability of the project will be in doubt. Mr McLaren has to make money from the 12 flats he is selling in order to help fund those he will make available for rent.”

When the affordable housing aspect of the application fell through, a note from planners last year made clear Gibson’s position remained unchanged: “The MSP is aware of the fact that the current proposal no longer includes the provision of affordable housing units, but has not withdrawn his letter of support for the development.”

Gibson’s role in the application, which was approved, has been questioned after it emerged he has a financial relationship with McLaren. The MSP lives at Ladeside Gardens in Kilbirnie, near Largs, in a property bought by McLaren for £249,000 months before the 2007 election. He first listed the address as his home during the Holyrood campaign.

Gibson’s wife, Glasgow councillor Patricia Gibson, registers the address as accommodation she rents. The couple pay an undisclosed sum for renting McLaren’s four-bedroom house.

Gibson has also channelled around £1300 of public money to his friend’s business since his election two years ago, claiming for at least 17 overnight stays at the McLaren Hotel on his expenses, at £75 a time.

McLaren’s business interests were put under the spotlight earlier this year when it was reported that one of his tenants, Margaret Dragsnes in Erskine, faced eviction despite being up to date with her rent. It was claimed that McLaren had not been paying the mortgage on the property.

Gibson said he pays a “market value” rent for the property in Kilbirnie, adding: “The McLaren Hotel represents a good deal for the taxpayer. I pay £75 a night. For that I get bed, breakfast, evening meal and a car to travel to meetings and surgeries around Arran. Incidentally, Scottish ministers, councillors and officials who visit Arran stay at the luxurious Auchrannie Hotel and Spa, often taking cars over with them.”

Des McNulty, the Labour MSP for Clydebank and Milngavie, said: “These are serious revelations. There needs to be absolute and full disclosure. MSPs have a duty to be completely transparent.”

Margo Macdonald, an MSP for the Lothians, said: “The equation of a planning application, plus friendship and a tenancy equals a load of trouble that an experienced politician like Kenny Gibson should have anticipated.”

McLaren did not return calls.