FIRST Minister Nicola Sturgeon announced the award and price of the disastrous contract awarded to Ferguson's for two CalMac ferries before it was finalised, MSPs have heard.

Billionaire Jim McColl said the First Minister publicly declared the price-tag was £97m while his Ferguson Marine yard and fellow Port Glasgow based state ferry firm CMAL were still negotiating over the cost.

Speaking yesterday at a meeting of the Holyrood committee which is probing the affair, he concluded his evidence by calling for a full public inquiry.

Earlier, Mr McColl said: “We were told that because it [the price] was publicly announced we were stuck with it."

Ms Sturgeon had visited the Port yard in August 2015, on the same date then-Tory Chancellor George Osborne was later going to be announcing an extra £500m for the Faslane nuclear base.

During his evidence Mr McColl accused Finance Secretary Derek Mackay of having 'defamed' the management at Ferguson Marine in a parliamentary statement.

Mr Mackay last year told MSPs previous management at the yard had been 'disastrous'.

Businessman Mr McColl also said criticisms of the yard contained in a recent report by government appointed turnaround director Tim Hair were 'absolutely scandalous'.

He said Mr Hair’s claim that 95 per cent of the design work had yet to be agreed after five years was 'nonsense', and that 60 to 70 per cent had been.

Mr McColl’s Clyde Blowers empire took over Ferguson Marine in Port Glasgow in 2014.

The following year, Caledonian Maritime Assets Ltd (CMAL), the state owned firm behind CalMac, awarded it a contract to build two new CalMac ferries.

However the deal was plagued by significant design changes, delays and disputes over cost, with the yard’s management and CMAL blaming each other.

Ferguson Marine went into administration last year before being nationalised and the boats are expected to cost double the original price and be delivered four years late.

The Scottish Government has also written down £45m of taxpayer-funded loans to Ferguson Marine to help it through cash flow problems, taking the total bill to around £250m.

Mr McColl told the committee Ferguson’s, the last civilian shipyard on the Clyde, had initially calculated it could do the work for £105m, and CMAL tried to negotiate it down to £97m.

He said the yard was ready to do the work for no profit, with the vessels acting as a 'good reference' for future contracts.

He said: “We were in negotiations with CMAL to try to get it down to £97m.

“Before we agreed the negotiation the First Minister announced we had been picked as preferred bidder and the price would be £97m.

“They said ‘It’s been announced by the First Minister and you will just have to accept it'.”

He said that CMAL had probably told Ms Sturgeon the work was achievable for £97m.

Mr McColl said CMAL had refused to discuss arbitration to sort the breakdown in the relationship with Ferguson Marine.

He said: “I had to make a personal appeal to the First Minister to get them round the table.

“The chairman of CMAL refused 14 times to get involved.”

Mr McColl also claimed Ferguson’s had to ban an individual from CMAL from the yard because he was 'bullying people on the yard'.

Earlier, MSPs heard CMAL was 'remarkably difficult' and 'aggressive' as the contract went wrong.

Luke van Beek, a former independent adviser to the Scottish Government on shipbuilding, said some CMAL actions were 'very unhelpful'.

Mr van Beek said CMAL should have agreed most of the design and build specifications before the work on the design and build contract began.

However he also said Ferguson Marine -who ultimately had to rip out some work and start over because of design changes - should not have started work on the boats before the design was agreed.

Mr van Beek said: “There were faults on both sides - no doubt about it.”

The committee previously heard that the relationship between Ferguson Marine managers and CMAL broke down completely in the latter stage of the contract, and work ground to a standstill.

Mr van Beek confirmed the relationship had broken down to the point where it became very adversarial, and that he had informed Finance Secretary Mr Mackay.

He said he had met with CMAL bosses on several occasions.

He said: “On every occasion I met with them they were remarkably difficult to deal with.

“On at least two occasions they were very aggressive.”

He said CMAL had 'no interest' in compromising and rejected one idea 'out of hand'.

He said: “They thought it would be better that Ferguson’s went into administration.

Mr van Beek added he had been surprised his recommendation that the dispute be settled through arbitration was not taken up.