A bankrupt property tycoon has been criticised after he helped launch plans for a massive housing development in Lanarkshire.

Ex-Celtic director Brian Dempsey, who is working for an investment fund based in Gibraltar, is behind a multi-million proposal to build hundreds of homes next to Moodiesburn.

Local SNP councillor Frances McGlinchey described Dempsey as "Teflon man" and said the idea was contrary to the area's local plan.

Dempsey, 64, made his fortune in property development and spent a number of years in the Cayman Islands.

He is renowned for leading the opposition to the White and Kelly families' control of Celtic FC in the early 1990s.

Dempsey has been a loyal Labour supporter, but he also enjoys warm relations with First Minister Alex Salmond and other SNP politicians.

His business reputation took a dent last year when it was revealed he had been sequestrated, the Scottish word for bankruptcy.

The move related to a dispute over an alleged £5 million loan due to the Bank of Scotland, although the sequestration papers stated that his total debt was £10,941,000.

By contrast, the businessman had estimated assets of £50,000.

The bankruptcy order is expected to end in June.

Despite his acute financial problems, Dempsey is an adviser for a controversial plan to build on agricultural land next to Moodiesburn, a suburb eight miles to the north east of Glasgow city centre. The proposal includes up to 500 housing units, a supermarket, health centre and retail facilities.

A public exhibition is to be unveiled later this month, while a "proposal of application" is to be made to North Lanarkshire Council by the "Iris Strategic Fund Ltd".

The Iris website lists Dempsey as part of its management team, and refers to his "exceptional reputation".

No mention is made of the bankruptcy.

Although the fund states that its aim is to "achieve capital growth through investment in strategic land sites in the United Kingdon", the vehicle's secretary, administrator, auditors, bankers and legal advisers are based in Gibraltar.

Dempsey's involvement in the Moodiesburn plan came to light after he contacted elected members days before the local campaign started.

In a letter to a sitting councillor, he wrote: "I wanted to write to you out of courtesy to advise you of a project I am proposing within your area."

He added: "I would be delighted to meet with you and outline the proposal, the planning gain and the substantial economic benefit of the community which I believe will allow you to deliberate on the matter with the benefit of full knowledge."

The name on the letterhead was Strathvale Holdings, a Dempsey family firm, while the email contact address was for another company, Chepstow Holdings.

McGlinchey said: "Brian Dempsey is like Teflon man. This proposal is a major deviation from the local plan. I've got my concerns about people coming in and imposing their views on the community."

A spokesman for the North Lanarkshire branch of the Scottish Green Party said: "We are concerned about the council's seeming over reliance on private property development as a regeneration tool.

"There are many existing houses that would benefit from refurbishment rather than putting more pressure on North Lanarkshire's precious belt."

Dempsey said the idea made "good sense", adding: "This is a proposal by a land fund. I get payment only on results. One of my jobs has been to explain to local councillors what the development is."

On his sequestration, he said: "The trustee is dealing with it."