SCOTLAND'S Auditor General has been asked to launch a formal investigation into Ross Finnie's decision to cancel the contract for a £10 million fisheries protection vessel.
Mr Finnie cancelled the tender process last month after it had been provisionally awarded to Appledore, a Devon company. It will now be rerun, giving other companies, including Ferguson's of Port Glasgow, another chance to go for the contract.
But that decision angered Appledore workers and management. Geoffrey Cox, the MP for Torridge and West Devon, yesterday said there was enough evidence to suggest public money had been mismanaged, and called for the Auditor General to launch an inquiry.
Mr Finnie has maintained the contract was cancelled because of a "fatal flaw" in the process and that mistakes had been made tendering it.
This could have opened the Executive up to legal action had the contract been allowed to continue.
However, as The Scotsman revealed yesterday, the minister has been a lifelong friend of Alan Dunnet, the chief executive of Ferguson's, and this led to warnings that Mr Finnie might have broken the ministerial code by failing to declare his interest in the firm before taking the crucial decisions.
Mr Cox said all this had added to the feeling of grievance in Devon and fuelled a suspicion that the contract was not dealt with fairly. He said: "Until the facts are clear, there will remain an unpleasant, fishy smell over this."
Mr Cox has asked the Auditor General to look into both the handling of the fisheries vessel contract and also the way the Department of Environment and Rural Affairs looks after public money.
The Tory MP said the bidders might now demand compensation and a "substantial amount" of public money could be wasted. Mr Cox added: "[This gives] strong grounds for the belief that public money may not have been used properly, efficiently and effectively in this and possibly other procurements carried out under the department's control."
However, the Executive claimed any decision made on the fisheries protection vessel was ultimately made by the chief executive or the organisation, rather than Mr Finnie.
A spokesman said: "The award of contracts is a decision for the chief executive of the SFPA. There is therefore no conflict of interest to consider."