THE MP at the centre of a police investigation after around £30,000 apparently went missing from a pro-independence campaign group's accounts has stepped down from the SNP, as it emerged the party knew about concerns over the organisation's finances weeks ago.

Natalie McGarry last night resigned the SNP whip at Westminster meaning she is automatically suspended from the party after Women for Independence, which she co-founded, called in police over discrepancies between donations and expenditure.

It is understood that an internal audit, carried out by two senior Women for Independence figures and a chartered accountant and covering 2014 to March this year, revealed concerns about money raised for the group through an online PayPal system, which was linked to the MP's personal bank account.

In what will be viewed as a huge embarrassment to the SNP, Ms McGarry has become the second of the party's new intake of MPs to resign the whip after becoming embroiled in a financial scandal. Michelle Thomson stepped down in September after questions were raised over her property dealings. Both will sit in the Commons as independent members.

HeraldScotland: Michelle Thomson

While the SNP denied having any prior knowledge of Ms Thomson's property deals, it last night admitted that it had been aware "for a few weeks" that Women for Independence was investigating alleged financial discrepancies.

However, party sources denied claims from within Women for Independence that a senior SNP figure was made aware around a month ago that Ms McGarry, who was responsible for the group's finances, was at the centre of the internal investigation and the party was told she should stand down as an MP.

Women for Independence, which is not formally affiliated with the SNP but has several party members in key positions, called in police on Sunday following a meeting of its National Committee.

Seven SNP candidates for the upcoming Holyrood elections sit on the committee and were present at the meeting, putting their names to a statement sent out to members which stated that opportunities for obtaining adequate evidence or explanation for financial discrepancies had been exhausted.

Nicola Sturgeon, speaking yesterday afternoon before it emerged that Ms McGarry was stepping down, said she would "consider action" against her MP but that she did not have detail "about the basis or the substance" of the concerns.

According to a confidential Women for Independence financial report from March 2015, which is in the MP’s name, the group raised £49,816.23 in 2014, following three successful online fundraisers. Expenses detailed included £28,500 during the referendum short campaign, with costs after the vote including £2,500 in wages and £2,900 on merchandise.

In the internal email, in which Ms McGarry states her pride at being involved with a "monstrous regiment of women", she said the accounts would be fully audited and presented to the first available meeting of the Women for Independence national council. It is understood that the audited accounts were never provided.

According to group sources, the campaign had two separate accounts during the period that is under the spotlight. The first was a Women for Independence bank account that was largely cheque-based.

The second was a PayPal account used to collect online donations for Women for Independence activities, including campaigning. It had three online fundraising drives in 2014, raising £20,823 in April, £15,186 in August and £15,615 in October, with potential donors promised the group would use "every penny wisely". The audit revealed concerns about money raised through the PayPal system linked to Ms McGarry’s own account.

In a statement issued on behalf of the MP by solicitor Aamer Anwar, it was claimed that Ms McGarry had chosen to resign from the party whip at Westminster "in the best interests of her party and constituents" and would "continue to fight for the people of the East End".

It added: "She maintains she has done nothing wrong but is conscious that the events of the last 48 hours are distracting from the job she was elected to do on behalf of the SNP. She has a proud record as a principled activist and states she is determined to clear her name.

"Fortunately in our legal system we still believe in a presumption of innocence. What has been reported to Police Scotland are financial discrepancies, yet they have not even established whether criminality is involved.

"Yesterday at Natalie’s request I contacted Police Scotland to advise them that she would speak to them if they wished to. Today I have instructed forensic accountants to obtain all the necessary information which will then be provided on Natalie’s behalf to WFI as well as Police Scotland to assist them in reaching a swift conclusion."

A spokeswoman for the SNP said: "The SNP have been aware in general terms for a few weeks that Women for Independence were looking into alleged discrepancies in their finances.

"Women for Independence is an entirely separate organisation and we have no role in their financial arrangements. We have received no detailed information and no documentary evidence in relation to these alleged discrepancies from Women for Independence at any point."