The police investigation into the SNP’s finances has grown beyond the initial allegation of fraud, Scotland’s chief constable has confirmed.

Sir Iain Livingstone hinted Operation Branchform had expanded to look at “potential embezzlement” and the “misuse of funds” since being launched two years ago.

He said: “It's moved beyond what some of the initial reports were, and that's not uncommon in investigations such as this.”

Opposition parties said the probe had "opened a can of worms".

Sir Iain described the investigation as “prudent, thorough and proportionate” and defended the infamous blue evidence tent erected outside Nicola Sturgeon’s house.

It was needed “to protect the interests of justice” as well as the individuals involved, he said.

“We've done the right thing. The rule of law and the interests of justice must prevail.”

Police Scotland is investigating whether £660,000 raised by the SNP for a second independence referendum was spent on other things.

Sir Iain, who stands down as head of Scotland’s single police force next month, was speaking in one of his last braodcast intervews on Radio 4’s Today programme.

Former first minister and SNP leader Nicola Sturgeon, her husband the former SNP chief executive Peter Murrell, and the former SNP treasurer Colin Beattie MSP, have all been arrested, questioned and released without charge since April as part of the probe.

Officers have also searched and removed material from the Sturgeon-Murrell home in Glasgow and SNP HQ in Edinburgh, and seized a £110,000 luxury caravan from outside the Fife home of Mr Murrell’s elderly mother.

Ms Sturgeon has said she is innocent of any wrongdoing.

Police Scotland launched Operation Branchform in July 2021 after a complaint from pro-independence activist Sean Clerkin and six others about the Indyref2 fund.

Asked why the investigation was still ongoing after two years, Sir Iain said financial probes were complex and involved court approved measures and access to bank information.

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He said: “Investigations into the finances of an organisation, the finances of an individual, are often complex.

“Investigations around fraud or investigations around potential embezzlement or investigations around the misuse of funds take time. 

“You need to go and obtain information from banks and other financial institutions. We can't just do that automatically. 

“We need to go and seek judicial warrants for that. There needs to be a process around that.

“So the time that's been taken, in my judgement, is absolutely necessary.

“There's been a prudent, thorough and proportionate investigation carried out. I have been aware of this investigation since the outset. 

“It has got a dedicated team of specialists who are involved in it and they are working very closely with our prosecutors, the Crown Office in Scotland, in terms of the steps that are taken. 

“What I would say is that had we not carried out this investigation in the manner we have, I would rightly have been accused of a significant dereliction and neglect of duty. 

“That's not the case. We've done the right thing. The rule of law and the interests of justice must prevail.”

Did the investigation “get bigger from the original inquiries”, Sir Iain was asked.

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He replied: “It's moved beyond what some of the initial reports were, and that's not uncommon in investigations such as this.”

Asked if it was pproportionate to put a police tent on Ms Sturgeon’s front lawn, he said: “It absolutely was, given the circumstances of that search. 

“The search warrants that had been craved from the independent court, the judge that issued the search warrants to us, I know the full circumstances of the case.

“The tent was there, as well all the other measures, to protect the interests of justice and to protect the individuals involved. So it was a proportionate and necessary step.”

Asked when the investigation was expected to conclude, Sir Iain said: “I can't put any absolute timeframe on it, but matters will progress in a proportionate and timeous manner.”

The SNP has said it will cooperate fully with the investigation.

Scottish Labour deputy leader Dame Jackie Baillie said: “It is right that Police Scotland is investigating every aspect of this case.

"From what was a single complaint, it now appears that there are multiple lines of inquiry and a can of worms has opened up.

“It is clear that Chief Constable Livingstone and his officers are working hard to shine light on this unedifying period in Scottish politics.

“A culture of secrecy has clearly enveloped the SNP and the Scottish Government and the people of Scotland deserve answers.”

Scottish Tory chairman Craig Hoy added: “Confirmation that the investigation into the SNP’s finances has moved beyond the initial complaint only highlights the seriousness of this investigation.

“We have also seen that Police Scotland have been forced to spend over £800,000 investigating the SNP’s finances at a time when police budgets are already stretched to their limit.

“As the investigation expands, Nicola Sturgeon and other senior SNP figures – including Humza Yousaf – must continue to cooperate fully with it and be fully transparent at all times.

“The murkiness surrounding the SNP’s finances is not going away and the nationalists are distracted at the worst possible time."