THE Government was at the centre of a new row over the controversial Knoydart estate yesterday when it emerged that Heritage Secretary Chris Smith stayed there at the weekend, despite investigations by the Serious Fraud Office and the Department of Trade and Industry into officials of the company which owns the estate.

Scottish Secretary Donald Dewar is believed to have declined an invitation to stay at the estate at the weekend to avoid any potential embarrassment, but Mr Smith accepted and stayed at Inverie House, which is run by the new managing director of Knoydart Peninsula Ltd (KPL), Mr John Turvill.

Two of the company's new owners, Mr Stephen Hinchliffe and Mr Christopher Harrison, have already been the subject of an SFO investigation and DTI action in relation to the collapse of other businesses. Their ownership of Knoydart has been raised in Parliament and will be the subject of an adjournment debate a week tomorrow.

Opposition parties last night attacked the Minister for being ''insensitive'' to local feeling, but a spokesman for Mr Smith declined to confirm whether he had been appraised of the situation with KPL.

He said: ''The only comment Chris Smith has on this is that he had a very enjoyable weekend on Knoydart walking and climbing with friends and spoke to a wide variety of people from all parts of the local community while on the island (sic).''

A spokesman for Mr Dewar would say only: ''The Secretary of State had a cold and decided to stay in Edinburgh in order to shake off that cold.''

However, one source revealed: ''Once it was discovered that where he would be staying on the estate was owned by Mr Hinchcliffe, there was no way he was going.''

Local Labour MP David Stewart learned of Mr Smith's visit only when he led a delegation to Knoydart to meet Mr Turvill yesterday. He was clearly in a difficult position, as local councillor Charlie King described Mr Smith's visit as an error of judgment.

Mr Stewart said: ''What I can say is that it was not an official visit. Parliamentary convention holds that any MP or Minister coming to this constituency has to write to me, and no such letter was received. If an official letter had come to me it would have got an official response and I think you know what it would have been.''

The SNP's parliamentary land reform spokeswoman Roseanna Cunningham described Mr Smith's stay as ''hugely ill-advised'' and accused him of ''partisanship'', adding that he must be ignorant of, or insensitive to, the controversy over the purchase of the estate.

A spokesman for the Scottish Liberal Democrats said that, at the very least, his actions were ''insensitive to local feeling''.

Meanwhile, amid growing speculation that the new owners of Knoydart will shortly face further court action in relation to other companies which went into liquidation owing millions of pounds, Highland Council and Highlands and Islands Enterprise yesterday confirmed in Knoydart that they are investigating the possibility of a compulsory purchase order to secure the estate if the community-led initiative fails.

Mr Arthur McCourt, chief executive of the council, and Mr John Watt, head of the community land unit at HIE, both stressed that their organisations backed the community-led Knoydart Foundation, which had already tried to buy the 16,500-acre Knoydart Estate and is conducting a worldwide appeal to help secure it. If that eventually failed, a CPO might be considered.

They also said that they had made clear to Mr Turvill that there would be no question of public support for the estate's development plans without the endorsement of the local community.

However, Mr Turvill said: ''I feel that the pressure the estate has been under has been a form of intimidation. We have a business plan for the estate which we need to implement and at present it is quite an interference, but we are resolute, more determined to go forward and put this place right.''