MSPS have warned the head of Scotland’s prosecutors cannot be trusted to “mark his own homework” amid calls for a judge outside of the country to lead a public inquiry into malicious prosecutions.

David Whitehouse and Paul Clark were prosecuted by Police Scotland and the Crown Office for their part in the takeover of Rangers in 2012.

But the investigations have been ruled as “malicious prosecutions” and have resulted in the Crown Office paying Mr Whitehouse and Mr Clark £10.5 million each in compensation while their combined expenses have tallied another £3 million of public money.

The Scottish Conservatives have called for a full public inquiry to be held into the fiasco, led by a judge from another UK nation - pointing to the potential role of former lord advocate Frank Mulholland, who is now a top Scottish judge.

READ MORE: Lord Advocate apologises for Rangers sale malicious prosecutions

Lord Advocate James Wolffe told Holyrood yesterday there had been “significant departures from standard practice” but did not concede criminality by anyone in the Crown Office.

He also denied that anyone had acted with malice, despite the admission the prosecutions were malicious.

Tory MSP Murdo Fraser led a Holyrood debate on what he described as an “unprecedented scandal in Scottish legal history” and has demanded that a judge outwith Scotland should lead an independent inquiry.

Mr Fraser said the episode is “what we might expect to see in a third world dictatorship”, warning that despite the statement by the Lord Advocate yesterday, we are “no closer to an explanation how and why those individuals were victims of a malicious prosecution”.

He also suggested that other pending cases means the £24 million already paid out “may just be the tip of the iceberg”, suggesting the bill to taxpayers could soar to more than £100 million.

Mr Fraser told MSPs that it is “simply extraordinary and outrageous” that public money has been paid out for “catastrophic failings in the Crown Office”.

He stressed that an inquiry must take place into the fiasco but warned “there will not be public confidence unless it is done externally and conducted in public”, adding that the probe should be led by a judge from “another jurisdiction within the United Kingdom”.

The Herald: Conservative MSP Murdo FraserConservative MSP Murdo Fraser

Mr Fraser added: “Innocent men could have ended up behind bars with their good reputations destroyed because of malicious prosecutions. Taxpayers are left paying the bill.

“We cannot possibly trust the Lord Advocate to mark his own homework. While he concedes the need for a judge-led inquiry, that does not go far enough.

“Mr Wolffe’s predecessor Frank Mulholland is now a high court judge and is central to this scandal.

“Given that Mr Whitehouse has made allegations of criminality, it is therefore vital for a public inquiry to be presided over by an independent judge from outwith Scotland.

“It is worth noting that the Crown initially tried to dodge responsibility by hiding behind the convention of immunity from being sued.

“They are only being held to account due to the resources and determination of the litigants who won a landmark legal case ending this immunity.”

In response, the Lord Advocate said: “I agree with Murdo Fraser there should be a process of inquiry, that inquiry should be transparent and independent and should be led by a judge.”

But Mr Wolffe said it was “premature” of Mr Fraser to assume that “no Scottish judge that could fulfill that requirement”, warning that he “seeks to pre-judge".

The Herald: Lord Advocate James WolffeLord Advocate James Wolffe

Labour MSP Rhoda Grant told MSPs that “services will need to be cut” in order for the compensation to be paid out, adding that there needs to be a “public inquiry led by someone who is independent and whose legitimacy cannot be questioned”.

Scottish Liberal Democrat justice spokesperson, Liam McArthur warned the episode “is a scandal” adding that “it’s up with BiFab and the Ferguson shipyard” fiascos.

He added that the “colossal waste of taxpayers'’ money...will come at a cost to other areas of public spending”.

Mr McArthur warned that an investigation into how “grevious mistakes were unchecked for so long” can only be done by a “full independent inquiry led by a judge outwith Scotland”.

Tory MSP Adam Tomkins claimed the fiasco “stinks of corruption”, accusing the former lord advocate of going “out of his way to see to it that two innocent men were hounded by the state”.

He added: “In any normal country, heads would roll.”

The Scottish Government’s Parliamentary Business Minister, Graeme Dey, said the SNP does “not have a principle objection” to any inquiry being led by a judge from outwith Scotland.

He added that “there must be full and open reflections and investigation” into what went wrong.

But he said that “there would be merit” in an independent probe taking place “once all the relevant legal proceedings are concluded”.