POLICE 'withheld' emails and recordings allegedly hacked from Craig Whyte and once held by former Rangers supremo Dave King sought by a key club takeover figure who is suing over his wrongful arrest in a fraud probe.

That is the assertion of Duff & Phelps executive David Grier's legal team who are accusing the Crown of "misconduct" as they launched a multi-million case against the police and prosecutors over the botched probe into the takeover the Ibrox club by Craig Whyte.

The so-called Charlotte Fakes cache of documents were seen as key in the decision to pursue the club fraud investigation.

But at the Court of Session, Gerry Moynihan QC, for the Lord Advocate, warned that the Charlotte Fakes collectionof 100,000 emails and recordings some of which were put on the internet were used as "a basis for blackmail".

He said the cache had to be handled with "extreme care" and that it was "not a simple matter in terms of work and sensitivity".

Lord Tyre ruled that the cache should be disclosed to Mr Grier's legal team.

READ MORE: Lord Advocate admits damages liability in Rangers chief Charles Green's £20m malicious prosecution claim

Mr Grier and others were subjected to criminal proceedings with others in the wake of former Rangers owner Craig Whyte's purchase of Rangers from Sir David Murray for a £1 and its subsequent sale before a judge dismissed the charges.

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Officers suspected Mr Grier, of London, had broken the law during the sale of the Ibrox side and the businessman was charged with fraud and conspiracy.

Mr Grier has always said he was unaware that London finance firm Ticketus funded Craig Whyte's controversial purchase of the club by buying up rights to future season tickets.

The damages cases come three years after Mr Whyte, who was the last man standing in the fraud conspiracy case, was acquitted of taking over the club by fraud at the end of a seven-week trial.

Mr Grier is suing the Crown for £2million and Police Scotland for £9m over his wrongful arrest.

The 58-year-old has also demanded a public apology from officials after the Lord Advocate admitted the “malicious prosecution” of his former colleagues former Rangers administrators David Whitehouse and Paul Clark last month.

The pair were awarded an interim payment of £600,000 at the Court of Session in Edinburgh in a previous hearing and will receive an apology from Mr Wolffe.

Andrew Smith QC, representing David Grier, said the Charlotte Fakes cache and other documents in connection with the executive's alleged involvement should be handed over believing it showed he knew nothing of the controversial nature of the Ticketus deal at the centre of collapsed fraud case.

He said it was "outrageous" that he could not have access to the Charlotte Fakes cache which as Detective Chief Inspector Jim Robertson had relied on them to pursue Mr Grier.

READ MORE: 'A shameful episode in prosecution service history' - Lord Advocate admits malicious pursuit of ex-Rangers boss in fraud case

Mr Smith said the Charlotte Fakes cache was recovered by the police following communications between DCI Robertson and Mr King and believes it will show that Mr Grier should not have been prosecuted.

He said Mr King had obtained the cache "from an individual behind the Charlotte Fakes Twitter feed along with emails and recordings," he said.

During Craig Whyte's fraud trial his lawyer said that an individual known to the Crown "stole material" after hacking into the former Rangers owner's computer.

"They are saying it is disproportionate to hand over this now. Which is a very surprising position to be taking," he said.

"Mr Robertson is saying the whole story is in these [Charlotte Fakes] conversations.

"He is relying on that database and when I question him to say there is no evidence Mr Grier did what you said he did, I can just see him in the witness box, and smiling, and saying it is all on the database, Mr Smith. And I have had a very valid basis to conclude that Mr Grier was up to no good. "Well that is outrageous, that I am expected to accept that without being able to cross-examine on it."

Motions to disclose the cache and other documents were opposed by Police Scotland.

Alastair Duncan QC for Police Scotland said it would take 60 days to "interrogate" any cache if it had to be handed over.

Mr Grier's damages claim is based on the fact partly relates to damage to his reputation.

The summons states: "He was suspended from employment after his detention, pending resolution of the charges.

“He was paid his salary but was deprived of bonuses, details of which will be produced.

“He suffered serious damage to his reputation and was deprived of promotion opportunities as a result.

“He lost contact with business associates as a result of being tainted with allegations of fraud, which he has never been able to re-establish.”

Lord Tyre agreed that the Charlotte Fakes cache should be disclosed and would be overseen by "a commissioner". It is believed that is a reference to the Scottish Information Commissioner deciding the extent of the level of disclosure, and what should be exempt to prevent breaches of confidentiality.

"It does seem to me that insofar as this material has been relied on by the police in making decisions, it is only fair that it should be made available to the pursuer, not only in relation to documents regarded as incriminating but also to the presence of documents that might or ought to be exculpatory."

The case continues.