THE row over £45m in Scottish Government loans given to Ferguson's shipyard has deepened.

Finance Secretary Derek Mackay was forced to answer an urgent question in the Scottish Parliament over the payments and changed his previous justification as he confirmed Holyrood was kept in the dark for seven months.

After previously saying public money was used to help the firm 'diversify', Mr Mackay told MSPs that the cash injection for the Port Glasgow yard was used to help ensure its 'viability'.

The minister also acknowledged that the money was linked to problems fulfilling a £97m contract for the two new CalMac ferries which have been hit by delays and cost overruns.

Mr Mackay also revealed he waited until April this year before telling Holyrood’s finance committee about giving Ferguson's an initial £15m last September - by which time the loan was already drawn down.

In June, Mr Mackay publicly announced he was lending £30m to Ferguson's to 'further diversify their business by moving into innovative areas, like low-carbon marine projects, and target decommissioning work'.

It then emerged the government had also loaned the firm £15m last September, an arrangement which was withheld from the public on 'commercial confidentiality' grounds and only exposed after a request was lodged using Freedom of Information laws.

Greenock-born Tory MSP Jamie Greene asked Mr Mackay why money was supporting ferry contracts despite explicit statements that it was meant to win new business.

Mr Mackay said: “The financial support for Ferguson’s is to ensure the delivery, the viability, the ongoing continuation of work for the yard, to ensure they had working capital.”

Mr Greene said today: “Instead of addressing serious concerns over the Scottish Government’s handling of public funds, Derek Mackay has muddied the waters even further.

“He totally failed to address any of the major questions that hang over this loan and the new ferries being built.

“Whether it was for business diversification or plug a hole in the current ferry contracts, the public have a right to know and the government needs to be clear and transparent."

But Mr Greene has come under fire from Inverclyde MSP Stuart McMillan for asking questions over the money.

The SNP man said: “Mr Greene suggested the government has been frivolous with taxpayers’ money and is trying to cover it up.

“Mr Mackay had in fact shared information about these loans to the Finance and Constitution Committee earlier this year, even though he is under no obligation to do so.

"These are commercial loans, with commercial terms, bound by commercial confidentiality, and the Scottish Government respected these conditions.

“It’s incredible for Mr Greene, who has links to Port Glasgow like myself, to accuse the Scottish Government of wrongdoing when this SNP government have invested more than £1 billion in ferry services since coming to power in 2007.

“The SNP will do the right thing by Scottish industry and jobs – if that means that a Scottish shipbuilder is building vessels for the Scottish Government’s CalMac fleet, then surely that should be welcomed?”