Jackie Baillie has called on the SNP candidate standing in a crunch by-election to come clean over whether “the most scandal-struck party in Scottish political history” is fit to serve the public.

The deputy leader of Scottish Labour has accused Katy Loudon, who is vying to become the new MP for Rutherglen and Hamilton West for the SNP, of attempting to “hide from scrutiny”.

The accusation comes after it was revealed that the SNP leadership contest following Nicola Sturgeon’s resignation cost the party £160,000.

Police launched Operation Branchform two years ago to probe whether £660,000 raised by the SNP for fighting Indyref2 had been spent on other things.

Read more: Jackie Baillie attacks SNP over 'desperate and dishonest attacks'

Nicola Sturgeon, her husband former SNP chief executive Peter Murrell and former treasurer Colin Beattie have all been arrested, questioned and released without charge since April.

Officers also seized a luxury motorhome from outside the home of Mr Murrell’s mother.

The SNP’s accounts for 2022, released last week, failed to mention the police probe or what became of £500,000 still earmarked for Indyref2 in the previous year’s accounts.

It has now been revealed that the SNP ended 2022 with a deficit of £804,278, liabilities exceeding assets by £219,629, and only £46,039 cash at the bank and in hand.

Read more: SNP leadership contest blew £160k hole in party's finances

Scottish Labour, which believes its candidate Michael Shanks can reclaim the seat, is now demanding that Ms Loudon comes clean over whether her party – that gave the people of Rutherglen and Hamilton West Margaret Ferrier – is fit to represent the area.

Ms Ferrier was immediately suspended from the SNP after breaking Covid rules and sat as an independent until she was ousted by a recall petition earlier this month.

Ms Baillie said: “Try as she might to hide from scrutiny, the truth is that Katy Loudon is standing as the candidate of the most scandal-struck party in Scottish political history.

Read more: Yousaf claims SNP by-election win could force Labour benefit rethink

“From ongoing police investigations to financial chaos, Katy Loudon must explain why she thinks the SNP is a fit and proper party to represent the area."

She added: “The people of Rutherglen and Hamilton West know what it is like to be failed by the chaotic SNP. For years they were denied proper representation by erstwhile SNP MP Margaret Ferrier.

“The time has come for Katy Loudon to come clean and explain to the people of the area why a party that can’t run itself can be trusted to govern Rutherglen and Hamilton West.”

Ms Loudon said: "Unlike Labour, the SNP delivers on our pledges - on free tuition, increasing the Scottish Child Payment to £25 per week per child, building a record amount of affordable homes, 1,140 hours of free childcare, and the baby box. 

"We're still waiting for Jackie Baillie and her colleagues to explain what the point of Labour is - with their support for Brexit, the two-child cap and the abhorrent rape clause, and their scrapping of pledges on free tuition, net-zero, and progressive taxation, their manifesto looks more and more like the Tories' with each passing day."