SNP tensions over Brexit have spilled into the open with a former minister set to join a Holyrood 'awkward squad' embracing EU withdrawal and a key party donor saying risks have been overblown.

Alex Neil will be part of a formal Cross Party Group (CPG) on Brexit which will acknowledge potential upsides, along with challenges, of leaving the EU in stark contrast to the Scottish Government's approach.

The establishment of the group comes partially in response to what some MSPs believe is an overly-negative discourse in Scotland, amid fears that repeated high-profile warnings of impending disaster risk becoming a self-fulfilling prophecy.

Read more: Independence 'more difficult if the UK leaves the EU Single Market'

The development coincided with Sir Brian Souter, the SNP's most prominent business backer, undermining Nicola Sturgeon’s predictions of economic devastation by saying Brexit is "not as big a deal as people are making out."

The Stagecoach tycoon told an audience of business leaders in Edinburgh that critics of the decision to quit the bloc are "overestimating the damage" and said Britain could be in a "positive place" if there is a deal for the financial services sector.

The position clashes with warnings from the First Minister, who has claimed Scotland faces being "driven off a hard Brexit cliff edge" with dire consequences for jobs, the economy and living standards. The Scottish Government has published analysis stating Brexit would result in Scottish GDP being up to £11 billion lower by 2030.

Labour MSP Neil Findlay, has also been closely involved in discussions over the new CPG, said: "The group brings together people from across the parliament to look at issues relating to Brexit in a non-partisan manner.

Read more: Independence 'more difficult if the UK leaves the EU Single Market'

"It will also provide a forum for us to get away from the polarised debate that has continued long after the vote took place and look at how we can take opportunities for making Scotland a better place."

It is understood that the group will call witnesses, publish reports, and could be seen as a rival to Holyrood's Europe Committee. It will include MSPs from all parties.

Oliver Mundell, the Tory MSP who also plans on joining the group, said it represented a chance to "raise the level of debate" by being more open about opportunities from Brexit. He added: "What we've had is a barrage of negativity. But looking at the result of the referendum, a significant proportion of Scotland wanted, at the very least, to see a different EU. So it's frustrating to go down this track of making out the EU is some kind of utopia where everything was perfect."

Officially 'Brexit-neutral', the group hopes to explore aspects of withdrawal that have so far received little attention. They include the potential for escaping restrictions that make it more difficult to nationalise rail and ferry services and new opportunities for promoting the Living Wage through public tenders outside of strict European procurement laws.

Mr Neil, an MSP who left the cabinet in May, has previously taken a different line to the First Minister on Brexit. He has said that Scotland remaining in the EU but retaining an open border with a post-Brexit England would prove "very difficult to achieve", weakening the independence case.

Read more: Independence 'more difficult if the UK leaves the EU Single Market'

In August, he said: "We therefore need to look at alternative scenarios other than EU membership in terms of the independence offer." In September, he urged Ms Sturgeon to focus on winning new powers for Holyrood from the Brexit process ahead of a push for full independence early in the next decade. Meanwhile, the First Minister has said a new referendum will take place before the UK leaves the EU and dismissed concerns over border posts.

An SNP spokesman said: "Brexit is far and away the biggest threat to Scotland’s economy, jobs and long-term prosperity, with a potential cost of up to £11.2 billion per year by 2030 and up to 80,000 lost jobs over the next decade.

"Sir Brian is one of Scotland’s biggest business success stories, and he is right to highlight the challenges involved in getting a solution for our financial services industry – something which is true for every other sector of the economy as well."