The Financial Times reported the Scottish Government provided a guarantee of £586 million to Sanjeev Gupta’s company GFG Alliance as part of the company’s purchase of the Lochaber smelter.
The figure has been made public for the first time after the newspaper won a two-year transparency battle.
The Scottish Government now estimates the net present value of the remaining guaranteed payments at £285.9m.
The revelation comes after ministers were slapped on the wrist for withholding the information from the public, with opposition leaders labelling it a “dodgy deal” and claiming the SNP was “desperate to avoid scrutiny”.
Concerns over the deal were raised after meetings between then-rural economy secretary Fergus Ewing and GFG Alliance figures came to light.
Scottish Labour said the questions around the deal were “piling up” for the Scottish Government, while the Scottish Liberal Democrats said the deal showed the government had been “taken for mugs” by GFG Alliance.
The agreement saw the Scottish Government guarantee 25 years of power purchases by Mr Gupta’s company from another business owned by his father, with the guarantee funding the purchase of the aluminium smelter
The guarantee allowed Greensill Capital to transform the guarantee into nearly £300m of debt with a credit rating equivalent to UK sovereign bonds to be created, funding the purchase.
The deal with the Scottish Government was provided when the smelter in Lochaber was purchased by GFG Alliance alongside two hydropower plants from Rio Tinto in 2016.
GFG Alliance also promised the construction of an alloy wheels factory near to the smelter, which was scrapped last year in favour of a £94m recycled aluminium factory, which could have created 2,000 jobs.
Earlier this year the government admitted just 50 additional jobs had been created by the deal.
Mr Gupta’s company hit financial difficulty earlier this year due to the collapse of Greensill Capital, which was partially blamed as Gupta’s company began to default on the more than $5bn (£3.7bn) of debt GFG Alliance had borrowed from Greensill.
The guarantee was reportedly provided, covering annual amounts between £14m and £32m, in return for a fee initially valued at £21.4m, but later written down to zero with a £33m provision due to the potential exposure of the deal.
GFG Alliance told the Financial Times: “The Lochaber aluminium smelter is a profitable operation, and GFG Alliance’s commitment to invest in a new recycling and aluminium billet plant there will secure the future of the operations, create new high-quality employment in the area and provide opportunities for the local supply chain.”
Ministers were also criticised by Scotland’s information watchdog for failing to release the total value of the deal after they claimed their own commercial interests would be harmed by its release.
In a decision notice published in mid-October, Scottish Information Commissioner Daren Fitzhenry criticised the use of commercial interest as a defence, saying it was unlikely the release of the information would prejudice negotiation of future guarantees.
He said: “The ministers do not, in general, operate in a commercial environment and the commissioner does not consider them to be doing so simply because they are providing funding to, or guaranteeing the liabilities of, business.
"They do not undertake such activities as participants in the market with the businesses concerned, in pursuit of profit, but rather to promote the economic and social well-being of the country, or parts of it, in furtherance of the wider public good.
"Nothing in the submissions offered here persuades the commissioner that the ministers’ interests should be regarded as specially ‘commercial’ here.
"There might be prejudice to the public purse if the guarantee were to be called up, and disclosure might (although the commissioner considers this less likely) prejudice the negotiation of future guarantees, but neither of these considerations suggests an interest that should properly be considered commercial (as opposed to more widely economic, or social).”
Reacting, Scottish Labour’s finance spokesperson Daniel Johnson said questions for the SNP were “piling up”.
He said: “The SNP can pretend to be above the sleaze engulfing the Tories, but these astonishing revelations tell another story.
“Questions are piling up for SNP ministers about this dodgy deal, which they have desperately tried to bury.
“The SNP urgently need to admit who signed off on this extraordinary arrangement – and why they spent two years trying to hide it from the public.”
Mr Ewing was criticised for attending a dinner with Mr Gupta and Lex Greensill, the founder of Greensill Capital, in 2017.
Scotland on Sunday later revealed Mr Ewing and six other ministers also met with GFG executives across nine occasions.
A summary of an August 2017 meeting between First Minister Nicola Sturgeon, Mr Ewing, and Mary McAllan, the government's director of economic development, warned the government had "reached the very limits of what was possible".
The briefing also noted "the potential to be overexposed to one company – a company that we know is on an aggressive expansion drive elsewhere".
Lobbying records also show Mr Ewing and representatives from GFG Alliance discussed the possibility of upsizing the projected output of GFG's never-to-be-built alloy wheel factory from two million wheels a year to three million at a dinner in March 2018.
However, the government said it had no notes about this dinner, nor the one in 2017, and no information about who paid for either.
Scottish Tory MSP for the Highlands and Islands, Jamie Halcro Johnston, said: “This is an astonishing amount of public money – and the fact that the SNP have tried so hard to hide the true cost of their dealings around the Lochaber Smelter is deeply worrying.
“This is all too typical of an SNP Government who are desperate to avoid scrutiny, at every level.
“The Lochaber smelter is a vital local employer, but while this support was supposed to generate 2,000 new jobs in the region, fewer than 50 new employees have so far been hired.
“This is not good enough. Local people are entitled to expect better outcomes from this level of public support.
"This is just the latest in a long line of problematic SNP experiments with Scottish industry, which have put jaw-dropping amounts of public money at risk.”
Willie Rennie, the Liberal Democrat’s economy spokesperson, said the government had been “taken for mugs”.
He said: “It looks like the Scottish Government have been taken for mugs by the GFG Alliance, with financial backing worth £586m in return for a handful of extra jobs.
“Lochaber was promised 2,000 jobs as a centre of alloy wheel production, but very little has happened since, apart from the delight in the boardroom of GFG Alliance that they were able to drive a financial return from that multi-million-pound financial backing from the SNP Government.
“The lack of transparency and attempts to withhold information on this deal will also be a concern to the people of Scotland. How can they hold their government to account when that government is working in the shadows?”
The Scottish Government was contacted for comment.