FINANCE secretary Kate Forbes has denied the misuse of public funds through the forfeit of £25m to complete two vessels at the centre of Scotland's ferry building 'fiasco' in a secret deal to pave the way for a shipyard company nationalisation.

Ms Forbes dismissed claims of wrong-doing in the wake of the Herald on Sunday revelation that Jim McColl, former Ferguson Marine Engineering (FMEL) chief and one of Nicola Sturgeon's own economic advisers was gathering evidence for potential court action while raising concerns over the 'loss' of the money.

A member of of the First Minister's Council of Economic Advisers and one of Scotland's wealthiets men, he has questioned the legality of the actions of ministers saying the £25m should have gone towards completing the ferries.

The 'lost' £25m related to a bond from HCCI, a subsidiary of Texas-based insurance firm Tokio Marine which ensured that should Ferguson enter into administration, meaning it was unable to deliver the two ferries, Caledonian Maritime Assets Ltd (CMAL), the Scottish Government-controlled taxpayer-funded company which owns and procures ferries for state-owned CalMac, would receive the money to enable completion of the vessels.

But to cover themselves against a payout, HCCI had a security over the assets of FMEL, owners of the last civilian shipyard on the Clyde, which stood in the way of the Scottish Government's nationalisation plan.

At the centre of the debacle is MV Glen Sannox and Hull 802, the lifeline island ferries, which are still languishing in the now state-owned Ferguson shipyard, with costs of their construction more than doubling from the original £97m contract, while their delivery is between four and five years late.

The Scottish Government is still owed over £40m from the collapse of Ferguson Marine in August 2019, having used £7.5m of what they were owed through loans to buy the business.

READ MORE: Jim McColl looks at court action against Scottish Government over ferry fiasco

Labour's shadow public finance minister Paul Sweeney asked Ms Forbes to release all correspondence between ministers, HCCI and CMAL if the £32m forced acquisition "was not an alleged misuse of public funds, attempting to cover up for the failures of CMAL and ministers that caused the collapse of the shipyards as asserted by the previous management of Ferguson Marine".

HeraldScotland:

He told Ms Forbes that ministers had the contractual right to claim the £25m refund guarantee which would have seen the insurance company take control of the shipyard.

Ms Forbes said that it was "incorrect" to say that £25m was lost to the public purse but said she was "restricted on what I can say" because there was a court case pending in connection with their deal.

"Agreement was reached with HCCI to release them from a performance bond that they had provided for Fergusons," she said.

"The commitment right now, having seen that the parliamentary inquiry proceed with extensive provision of information by ministers transparently and proactively provided, is to ensure that that there are vessels delivered for the communities that rely on them to ensure that the workforce are protected, and to ensure that there is a viable future for the yard and I would hope all members would join me in trying to secure those objectives."

Earlier, when asked by Mr Sweeney about Mr McColl's concerns about the £25m, Ms Forbes added:"By taking control of the business we were able to save Fergusons from the risk of administration, lift the threat of redundancy that was hanging over the staff and protect the local economy, all objectives that I'm sure the member supports."

READ MORE: State-run 'ferry fiasco' Ferguson Marine shipyard firm makes £100m loss in four months

A fortnight ago, ministers lost a £5m court claim made by HCCI in connection with refund guarantees they said was owed to them as part of their secret deal.

Mr McColl says key ministers including the First Minister have not yet been properly held to account for Scotland's lifeline ferry building debacle, and says he wants a judge to force an end to what he sees as an ongoing cover up.

The ferries contract has been plagued by design changes, delays and disputes over cost, with the yard’s management and CMAL blaming each other.

Mr McColl, the founder and chief executive of private equity investment firm Clyde Blowers, said at the weekend that the waiving of the £25m meant that the ministers' purchase of the business had effectively cost the taxpayer £32m.

Documents show that talks took place between ministers and HCCI before Ferguson fell into insolvency following concerns that the security would cause issues for any state takeover.

HeraldScotland:

A PwC report to ministers in considering options for Ferguson Marine's financial position four years ago highlighted that any agreement to amend the bond was "significantly unlikely to happen" and that "there are very few commercial reasons that would motivate them to make any amendments to this arrangement".

But ministers have confirmed that talks took place between ministers and HCCI before Ferguson fell into insolvency to "understand its intentions and consider what implications this would have for us, both in our role as second ranking creditor, and for our wider interests".

An agreement was reached that involved foregoing the £25m and in its place HCCI handed over an undisclosed sum.

A statement signed off by ministers went on: "An agreement was reached between HCCI and CMAL that would see HCCI pay a negotiated amount, release its securities and CMAL agree not to call the bonds. This allowed for the option of Scottish ministers’ control of the business in the administration period."

A month before the Scottish Government stepped in as Ferguson fell into administration, Ferguson raised concerns in a letter seen by the Herald about the secret negotiations with HCCI and that it might compromise their attempts to avoid insolvency and pursue what they described as "the solvent solution".

After falling into administration the former Ferguson executives subsequently accused the Scottish Government of having no serious intention of leaving it in private ownership while being warned nationalisation would be subject to EU state aid laws.

They accused ministers of forcing it into insolvency by rejecting a plan that would avoid any state aid claim, save the taxpayer at least £120m and prevent the costs of building two key lifeline ferries soaring to over £230m.

They registered their concerns a month before Ferguson went under and ministers took over.

HeraldScotland:

Mr Sweeney, further quizzed the finance secretary about a meeting Mr McColl said he had with the First Minister in May, 2017 in which he raised the "serious issues" his company had with CMAL.

He then met with the former finance secretary to "beg" the government to force CMAL to take part in a dispute resolution process over the failing ferry contract.

He said three expert independent consultants were then highly critical of CMAL's management of the ferry contract.

"So why did ministers ignore their own independent advisors and refuse to intervene at any stage of that long process to oblige CMAL to participate in a dispute resolution process," he asked. "That was a failure that has led directly to the disastrous outcome that we see with Ferguson's today, surely."

Ms Forbes ducked the question, saying: "Throughout this whole process, our aim is to ensure that these vessels.

"We remain committed to transparency and have co-operated at every stage of the parliamentary inquiry.

"Right now, our intention, and we stand firm on this, is to ensure that the vessels are completed, that the workforce is saved, and that the yard has a viable future."

After the Herald on Sunday revelation, Douglas Ross, the Scottish Tory leader, said: "This is a damning verdict from the former owner of Ferguson Marine and one of the SNP’s own economic advisers. SNP Ministers have continually failed to take any responsibility for their monumental failures in relation to this major infrastructure project.

“They have left island communities without lifeline ferries and blown millions of taxpayers' money. It is little wonder that Jim McColl has reached the end of his tether and is demanding further action is taken."