The Scottish Government has not clawed back any of the £500,000 in grants it handed a company that shut down in South Lanarkshire this year, causing the loss of 450 jobs.
The 2 Sisters poultry processing plant in Cambuslang was awarded Scottish Enterprise grants before closing its doors in August.
However, it has emerged conditions attached to the £534,00 subsidies received in 2015 to support jobs and assets in the town depended on the company remaining at the site until 2020.
The parent company also runs a slaughterhouse in Coupar Angus, near Perth. It was awarded £1.4 million in subsidies in June.
Ged Killen, Labour MP for Rutherglen and Hamilton West, who was involved in mediation talks after the Cambuslang announcement, said the terms of the grants had not been announced. He claimed details only emerged following a Freedom of Information request by a member of the public in Cupar Angus.
Mr Killen is writing to the Scottish Government to ask what they knew about the arrangement and what sanctions Scottish Enterprise can invoke for breach of contract.
“I am personally shocked and feel a sense of betrayal that no Scottish Government agencies or ministers raised the conditional elements of grants during the consultation over the closure of the Cambuslang site,” he said.
“Such knowledge may have helped achieve a better outcome for those workers who have lost their jobs.
“I have exchanged numerous letters with Paul Wheelhouse, the then minister for business, innovation and energy, and at no point did he reference the fact that public monies had been granted to 2 Sisters based on criteria to keep the plant open.
“At the time the Scottish Government claimed it was doing everything it could to help the workers at the 2 Sisters site in Cambuslang. It is clear from these revelations that was simply not true and it appears the Scottish Government withheld vital information that could have helped my constituents who are now out of work.”
A Scottish Enterprise spokesman said: “We can confirm the company did not meet its contractual obligation to retain project assets until the end of the period of conditions.
“We are in ongoing discussions with the company regarding the implications for the grant agreement of this.”