THE row over a £45m government loan to a struggling business owned by an adviser to Nicola Sturgeon has intensified after the Finance Secretary changed his justification for it and confirmed Holyrood was kept in the dark for seven months.

After previously saying public money was used to help the firm “diversify”, Derek Mackay told Holyrood it had actually been needed to keep it afloat.

He said the cash injection at Ferguson Marine Engineering in Port Glasgow, the last commercial shipbuilder on the Clyde, was used to ensure its “viability”.

He conceded the money was linked to Ferguson’s problems fulfilling a £97m contract for two new CalMac ferries, which have been beset by delays and cost overruns.

He also revealed he waited until April this year before telling Holyrood’s finance committee about giving Ferguson's an initial £15m tranche last September, by which time the loan was already drawn down.

Ferguson’s is part of the Clyde Blowers’ empire owned by Monaco-based billionaire Jim McColl, who sits on the First Minister’s Council of Economic Advisers.

Mr McColl bought the yard in 2014 after it went into administration, and the following year it was awarded the ferry contract by government-owned firm CMAL.

Despite a personal assurance from Mr McColl that the two ‘dual-vessel’ boats would arrive on time, final delivery has been delayed from this summer to spring 2020.

In June, Mr Mackay publicly announced he was lending £30m to Ferguson's “to further diversify their business by moving into innovative areas, like low-carbon marine projects, and target decommissioning work.”

It then emerged he had also loaned the firm £15m in September, an arrangement that was withheld from the public on “commercial confidentiality” grounds.

At the time, Ferguson Marine was struggling to meet the deadline for filing its 2016 accounts.

It has still not done so, and its last audited accounts are for 2015.

The first loan was only made public after a freedom of information request to ministers

With opposition parties increasingly dissatisfied with the government’s account, Tory MSP Jamie Greene forced Mr Mackay to the Holyrood chamber with an urgent question.

Mr Mackay said: “The delayed delivery of the two new CalMac ferries is disappointing, but the commercial loan facilities provided to Ferguson’s will support delivery of these vessels and help the business to diversify.”

Mr Greene asked why money was supporting ferry contracts despite explicit statements that it was meant to win new business.

Accusing Mr Greene of trying to “undermine” Ferguson’s, Mr Mackay said: “The financial support for Ferguson’s is to ensure the delivery, the viability, the ongoing continuation of work for the yard, to ensure they had working capital.”

Mr Mackay said he told the finance committee of the loans “in the spirit of transparency”, but then revealed his first mention of the September 2017 loan was April 24.

Mr Greene said afterwards: “Instead of addressing serious concerns over the Scottish Government’s handling of public funds, Derek Mackay has muddied the waters even further.

“He totally failed to address any of the major questions that hang over this loan and the new ferries being built.

“Whether it was for business diversification or plug a hole in the current ferry contracts, the public have a right to know and the government needs to be clear and transparent.

“This is a government clouded in secrecy, poor governance and a distinct lack of transparency.”

Meanwhile, Argyll & Bute MSP Michael Russell has said an “unacceptable” catalogue of problems with ferries in his constituency cannot be allowed to continue.

He said recent breakdowns and delays had highlighted “the absolute necessity of getting more vessels into the fleet” and exposed potential weaknesses in CalMac management.

A CalMac spokesman said it was doing its best with the resources available to it.

Asked why Mr Mackay waited seven months to tell the finance committee about the first loan, the Scottish Government said: “The earlier £15 million loan facility provided on a commercial basis by the Scottish Government to Fergusons was not publicised immediately for reasons of commercial confidentiality.

"In the interest of transparency, the Cabinet Secretary for Finance informed the Scottish Parliament’s Finance Committee of the loan and, following normal practice, the expenditure was reported to Audit Scotland. It will be recorded in the Scottish Government’s Consolidated Accounts for 2017-18 published this month.”