Then First Minister Jack McConnell was forced to raise the issue personally with UK ministers in an example of the sometimes strained relationship between the devolved administration and Westminster.
The leaders of the world’s major industrial democracies would meet at the luxury hotel complex in Perthshire in July 2005 to discuss the major international issues of the day.
While the Labour-Lib Dem coalition viewed the event as an opportunity to market Scotland as a destination for tourism and business, it had significant concerns over who would foot the bill for the number of extra police officers required.
At a cabinet meeting in June 2004 – one month before Gleneagles was publicly revealed as the host venue – ministers were told it had been “difficult to engage” with Whitehall officials.
Papers, released today under the 15-year disclosure rule, reveal that “a major public dispute” was in danger of breaking out between Holyrood and Westminster over the issue.
As the G8 summit was considered a foreign policy matter, its organisation was reserved to the Foreign Office.
Ministers in Edinburgh were told that while the event would bring “reasonable numbers of people to Scotland”, the immediate economic benefits would not be huge. On policing costs, cabinet minutes noted: “The Treasury has indicated that they would help meet costs,” but the initial offer was only a 25 per cent contribution.
“This was potentially a very serious situation as the costs associated with the summit would inevitably be in the public domain.
“In the event that it proved impossible to make sufficient further progress, cabinet would need to consider the consequences of various options, including a major public dispute with the UK Government.
“The First Minister has made it clear to senior members of the UK Government that failure to reach agreement on policing and security costs would place the Executive in an intolerable position which it would feel obliged to explain publicly.”
The political row over policing costs would drag on for another year, with the Scottish Government eventually confirming it would foot the bill for extra security.
In March 2005, then chancellor Gordon Brown pledged to hand Holyrood an extra £20m towards security costs. The SNP, then in opposition, claimed that Westminster should have paid all of the associated policing costs.
In December that year it was revealed the final cost of security for the G8 summit was £72m.
Police from across the UK were drafted in as leaders met at Gleneagles, with thousands of protesters gathering in Edinburgh.