SCOTLAND'S largest jobs quango, which is under police investigation for alleged misuse of EU funds, has again been rocked as almost all but one of its independent directors quit.

Following Glasgow City Council's use of emergency powers to suspend several senior officials at Jobs and Business Glasgow (JBG), it has emerged that four of its board have resigned, sparking further fears for its future.

The Herald understands the four, who include prominent business world figures, walked over their disquiet at potential conflicts of interest of other board members and how the city council has handled both the prospect of multi-million pound sanctions and the fall-out from the Police Scotland probe.

Senior sources have now questioned the ability for the council-owned agency to deliver its targets given the departures and suspensions of its chief executive and three senior colleagues.

The organisation has received around £4million in European Union funding in recent years.

It faces the prospect of paying all or some of this back after a routine audit by the Scottish Government found discrepancies in how the monies were accounted for, particularly around the issue of staff time devoted to the funded projects.

The four who have resigned include long-standing directors Dan Donald and Alistair McManus. Mr Donald is a director with Cruden Estates, one of the largest independently owned Scottish based construction companies while Mr McManus is an area director with the TSB bank.

The others are Donna Vallance, a vice principal at Ayrshire College and Caroline Stuart, Scotland director for computing firm Oracle Corporation.

One senior Jobs and Business Glasgow source said: "The board made sure it got the best type of people. It used a recruitment firm to get Donna and Caroline.

"It seems they were concerned that with councillors on the board it raised the potential of conflicts of interest over who they were acting in the best interests of.

"It seems the independent guys hit an impasse and have left. It's a tragedy really. It had been performing really really well but this is another huige bow for the organisation."

A city council source confirmed the move, adding: "It's no huge surprise. All is not well."

Jobs and Business Glasgow claims that in the 2014/15 period it engaged with over 16,000 unemployed city residents, supported over 3500 into work, assisted more than 7500 into training and helped 500 people to start up a business.

It is one of raft of organisations across Scotland whose European funding has been suspended following an audit or review, with the potential claw back by Brussels running into tens of millions.

Chief executive Calum Graham, as well as Mary-Theresa Smith, the organisation’s head of employability, Nancy Burns, head of youth and learning, and Rob Pryce, head of enterprise, business and the economy, were suspended in January.