The Scottish Government has been urged to launch an independent inquiry into the botched Deposit Return Scheme following the news that waste company Biffa was set to sue ministers.

The company, which was the logistics partner of Circularity Scotland, spent around £55m on vehicles, equipment and infrastructure, including a depot at Motherwell. They were also reportedly recruiting staff.

However, Circularity Scotland went into administration last year when the Scottish Government moved to delay the scheme for two and a half years following a dispute with the UK Government.

READ MORE: Taxpayer 'exposed' as firms sue Scottish Government over DRS

Over the weekend, a spokesperson for Biffa said the investments were made "in good faith and on the expectation and understanding that the delivery of the scheme had been mandated by the Scottish Government".

“Having carefully reviewed our position with our advisors, we can confirm that we are taking legal action to seek appropriate compensation for the losses Biffa has incurred."

MSP Fergus Ewing - who was temporarily suspended by the SNP for voting against Ms Slater in a confidence motion last year - said he fears more firms may follow suit.

At the time, Ms Slater, who was the circular economy minister, blamed the UK Government after ministers in Whitehall made clear the Scottish Government would only be given the necessary exemption to the UK Internal Market Act if they made substantial changes.

This included removing glass from the scheme, standardised labelling and the same deposit charge across the UK.

Ms Slater said the lack of detail around conditions laid down by Whitehall, including not knowing what that deposit charge would need to be, meant the scheme could not go ahead as planned.

However, CSL insisted that the scheme could have complied with the UK Government's demands and launched this year.

READ MORE: Circularity Scotland owes £70m following DRS collapse

In a question in Parliament, Mr Ewing asked the Scottish Government if they would “consider suing the UK Government” if Biffa’s claim was successful.

Gillian Martin, the Minister for Climate Action, said she was unable to comment on ongoing litigation, but said the Scottish Government “remains committed to the delivery of a deposit return system” and would continue to engage with industry and other nations across the UK to support the delivery of a UK wide DRS in 2027.

Mr Ewing said the sums of money lost as a result of the DRS's collapse were eye-watering.

“The minister will be aware that the taxpayer has lost £9m from the Scottish National Investment Bank, that will be a total write off, and that businesses may have incurred costs of possibly up to even £300m.”

He asked Ms Martin if she would consider holding an independent inquiry “into not just what went so very badly wrong, but also how to avoid these mistakes should there be some scheme in the future.”

The minister said the government would be “looking at how we take a DRS forward that is workable, that is within that whole common framework of how something could be actually simplified and rolled out across the UK.”

Tory MSP Maurice Golden asked the minister if she knew the “total amount of losses covering both capital and revenue by business in preparation for Scotland's failed deposit return scheme.”

The SNP minister said that the parliament had agreed the scheme and that it was “the UK government's refusal to give us a full exclusion from the internal market in the 11th hour that radically undermined the right of this parliament to pass and deliver regulations in clearly devolved areas."

“Mr Golden mentions the cost to businesses, but I would also add to that what's the cost of the environment of the fact that the scheme is not in place," she added.