NICOLA Sturgeon is facing accusations that she misled the Scottish public over a controversial investment deal with China.

Sir Richard Heygate, the representative of two firms who have agreed to work with the Scottish Government to secure a deal worth a potential £10bn, appeared to contradict the First Minister's claims that no firm proposals were "on the table" after the parties signed a memorandum of understanding (MoU) last month.

In an interview with the BBC, he said talks had taken place for over a year and revealed details of specific projects that had been discussed with the First Minister, adding that she had been "absolutely positive" and that work could begin within 12 months.

Sir Richard said there were hopes for affordable housing projects totalling 5,000 homes in Edinburgh, Falkirk and Ayrshire worth £500m while he also spoke of plans for a biomass plant and a large railway project.

Speaking on Wednesday, after it emerged that one of the Chinese firms was linked to corruption, Ms Sturgeon said: "There are no actual proposals on the table at this stage."

However, Sir Richard, who signed the MoU, said: "The most obvious one is affordable housing. We've already identified land space in three areas of Scotland for 5,000 affordable homes, which we would like to tackle very quickly as a first initiative.

"She [Ms Sturgeon] was just absolutely positive right from the start. We presented a number of particular projects in affordable housing, clean energy, developing new industrial parks, new infrastructure and she went straight for the ones that are most important.

"She said 'the two I want to focus on are affordable housing and clean energy, and I want to push those and I want to get them moving. I don't want this to be another initiative which is just going to be talked about and take forever. I want to get something moving this year.'"

He insisted the two companies - China Railway No. 3 Engineering Group Co., Ltd, (CR3) and Sinofortone - were "squeaky clean" with backing from the very top of the Chinese state.

CR3's parent company, China Railway Group Limited, was blacklisted by Norway's oil fund after its ethics council found that there was an "unacceptable risk that the company is involved in gross corruption". Sir Richard said he had "no idea" about allegations of bribery and corruption.

Jackie Baillie, Scottish Labour's finance spokeswoman, said the interview "lifts the lid" on what she considers a "secret deal" with the agreement not being announced by the Scottish Government and its existence only emerging in China.

She said: "The fact that discussions have been going on for a year without SNP Ministers providing any detail is extraordinary. On Wednesday Nicola Sturgeon said there were no proposals on the table, yet today the UK representative of the Chinese consortium has confirmed that at least three projects have been identified across the country. Nicola Sturgeon has simply not been telling the truth and that is unacceptable. Nicola Sturgeon has misled Scots on this deal.

"This deal stinks and it has done from the very beginning. First, SNP Ministers didn’t want people to know about this secret deal and they only published details under pressure from Labour and journalists. Then Nicola Sturgeon told us there were no specific proposals on the table but now we know that isn’t the case at all. Why can’t the SNP just tell the truth?

"It’s time for the SNP to stop the ducking and diving. Nicola Sturgeon should order the full publication of all documents relating to this deal, going as far back as a year ago when talks first began. The SNP can’t keep misleading people about this deal."

Willie Rennie, the leader of the Scottish Liberal Democrats, called for the publication of all records of discussions between the First Minister, her government and the two firms.

He said: "The Scottish Government must publish the minutes of the discussions that led to this agreement. We need transparency because there is a clear conflict between what was said by Nicola Sturgeon and the representative of the Chinese companies.

"Nicola Sturgeon's claim that this was only the start of the discussions was contradicted by the Chinese representative who made it clear that there had been extensive discussions including which projects should proceed this year.

"This makes it even more surprising that no due diligence had been conducted or reference to the Norwegian report made. This saga gets murkier by the day."

A spokeswoman for the SNP hit out at Labour and the LibDems, saying if it was left to them there would be no inward investment in Scotland to create new jobs.

She added: “The SNP is in the business of supporting Scotland’s economy and creating more and better jobs, as our success in securing a future for Scotland’s steel works shows. Labour and the Lib Dems seem to want to drive investment and opportunity away.

“As the First Minister said there is no list of specific projects on the table and there is no investment agreed.  Sinofortone may have a range of high level ideas for investment in private sector projects, as any investor would, but there are no specific projects under discussion with the Scottish Government.

“In fact we have published the Memorandum of Understanding, which shows quite clearly, that engagement is at a very preliminary stage.  

"While Labour and the Lib Dems carp from the sidelines we will get on with the job of creating more and better jobs in Scotland.”