An investigation by the European Competition Commissioner into the creation of a charitable trust to run Scotland's largest civic art collection has found no breach of European Commission rules.

The commission's inquiry into Culture and Sport Glasgow, instigated after claims by a whistleblower, concludes that "there is no convincing evidence for the existence of state aid".

It has also rejected concerns that CSG, formerly Glasgow City Council's culture and leisure services department, would not be covered by the Freedom of Information act.

The investigation was launched by competition commissioner Neelie Kroes in March of this year, just before the body came into official being, following claims there could be a breach of rules on both state aid and public tendering.

Scots Tory MEP Struan Stevenson claimed to have been told by the unnamed whistleblower that Glasgow had attempted to circumvent European legislation by transferring its culture and leisure facilities without putting the running of the service out to tender. The concern was that Glasgow could have been directly or indirectly subsidising a company, which is contrary to European Commission rules.

But in a letter sent to Mr Stevenson by the Commission states there has been no wrong doing on the part of the city council as it retains ultimate control over CSG and its services. It also states that the new body adheres to EC procurement requirements for the award of public contracts.

Last night Mr Stevenson said: "I am glad that the European Commission has fully investigated the transfer of assets to a trust by Glasgow City Council and I am satisfied and relieved that they consider that this arrangement does not breach rules on state aid."

A Glasgow City Council spokesman said: "This unsurprising decision is yet another vindication of our decision to establish Culture and Sport Glasgow. Fortunately it is only a small group of people who, for ideological reasons, are still opposed to this."