POLICE Scotland have launched a formal investigation into potential criminality involving SNP fundraising.

The force, which has been assessing a fraud allegation from a member of the public since late March, said it had escalated its work after consulting with prosecutors.

It has asked "anyone who has any information which may assist with this investigation" to get in touch.

Scottish Labour welcomed the investigation and said "the truth must be known" about any "impropriety", while the Scottish Tories said the situation was "increasingly murky".

The SNP said it would "cooperate fully" with the investigation.

The development is a huge blow to Nicola Sturgeon as SNP leader, especially as the party is run by her husband, SNP chief executive Peter Murrell.

The move follows the SNP raising more than £660,000 since 2017 specifically to fight an Indyref2 campaign, but spending some of the money on other things in the absence of another independence vote.

The party has now pledged to spend an “equivalent" sum on a second referendum, but refused to formallly identify this money in its annual accounts for 2020.

READ MORE: SNP refuse to identify Indyref2 funds in accounts despite cash row

In March, three members of the SNP’s finance and audit commmittee quit amid complaints about being denied access to the accounts.

In May, new SNP treasurer Douglas Chapman MP also quit, complaining a lack of transparency had stopped him carrying out his “fiduciary duties”.

SNP MP Joanna Cherry QC quit the party’s ruling body, the National Executive Committee, the same month, again citing issues with transparency and scrutiny. 

Treaasurer Colin Beattie MSP later insisted “amounts equivalent to the sums raised” would be spent on campaigning in future.

But he refused to separate out £666,953 earmarked for Indyref2 in the 2020 accounts as a “restricted fund”, as the party was under “no obligation to do so”.

This was despite the SNP having a restricted referendum fund in its 2012 accounts, when Mr Beattie was also treasurer.

Until now, Police Scotland has said it has been assessing “a complaint of alleged financial irregularity”. 

Last month it added: “During this initial work further information has been received which also requires to be assessed to determine if an investigation is required."

READ MORE: Nicola Sturgeon's husband Peter Murrell accused of 'hypocrisy' after urging financial transparency amid SNP secrecy row

Today, the force updated its statement.

A Police Scotland spokesperson said: "Police Scotland has now received seven complaints in relation to donations that were made to the Scottish National Party.

"After assessment and consultation with the Crown Office and Procurator Fiscal Service, we will now carry out an investigation.

"Enquiries are continuing and anyone who has any information which may assist with this investigation is asked to contact police."

Activist Sean Clerkin, who made the initial police complaint, said: “I’m very pleased the police have proceeded to a full criminal investigation so that all facts can be investigated and appropriate taken when the investigation is completed.”

Scottish Tory Chief Whip Stephen Kerr MSP, said: “The SNP have failed to be fully transparent over this funding for months.

"Senior figures have resigned from the party’s executive committee over the matter but the SNP leadership have still not addressed these serious claims.

“The public to deserve to know the truth. It is only right that Police Scotland are stepping up their investigations having received numerous complaints.

“The police must be allowed to explore every aspect of these complaints to ensure they get to the bottom of this increasingly murky situation.”

Scottish Labour deputy Jackie Baillie said: "I very much welcome the news that Police Scotland has launched an investigation into the claims of impropriety regarding donations to the SNP.

"For many months the SNP has been embroiled in internal fighting and recriminations over this most serious of matters.

​"The truth must be known, and Police Scotland must be allowed to carry out a thorough and detailed investigation."

READ MORE: Tom Gordon - SNP’s lack of transparency is an insult to its members

Alba party General Secretary Chris McEleny, who defected from the SNP in March, said he first raised concerns about the party’s Indyref2 funds in June 2019. 

A former member of the SNP’s ruling body, he said his life was then “made a living hell by SNP HQ staff members”. 

He said: “As this is now a formal police investigation it will be inappropriate for me to provide public comment, however like any responsible citizen I will answer any questions Police Scotland put to me on the matter.”

The Crown Office decline to comment.

However it is understood prosecutors have yet to receive a police report and have so far only provided advice.

An SNP spokesperson said: “We will cooperate fully with any investigation. 

"As we have made clear, all sums raised for independence campaigning will be spent on independence campaigning.”