An investigation into the disappearance of #40,000 of taxpayers' money at the West Dunbartonshire Activity Centre has been identified as the origin of the Wattersgate affair by the district Labour Party, writes John Linklater.

Breaking silence for the first time in the escalating dispute between councillors and senior officials, Mr Alistair Lang, chairperson of West Dunbartonshire Labour's local government committee, claimed that the breakdown began over a report from chief executive Michael Watters which found ''corporate responsibility'' for monitoring failures and recommended that further investigation of the scandal was unnecessary.

Brucehill Activity Centre was closed down in November amidst claims that an effective double grant had created an opportunity to use a council van for hire on private contract.

A suspected #40,000 remained unaccounted. An unsuccessful disciplinary action singled out against an individual officer involved in monitoring the centre had the consequence that, on procedural grounds, information on the background to the scandal could not be disclosed to councillors.

Their persistence with the question of wider responsibility, according to Mr Lang, led to a sequence of delays in getting to the bottom of the matter.

The current obstacle is an interim interdict, taken last week by Unison, the union representing Mr Watters in the dispute, to allege bias on the part of two councillors appointed to hear his grievance against senior council Labour group leaders, Councillors Andrew White and Jim McCallum. The union has until May 19 to substantiate its claim.

The original letter of complaint from Mr Watters against Councillors White and McCallum was made public only three days after the investigation began, according to Mr Lang. This drew the focus from the Brucehill issue, and the question posed over ''management culture'' within the Garshake council headquarters in Dumbarton.

Since then the commission of a Cosla broad inquiry was postponed within four days of starting by the grievance which itself has temporarily sidelined by the alleged bias issue. Mr Lang stressed that the investigation into the Brucehill Activity Centre will not be allowed to go away, but the delays have concealed what may prove to be the real catalyst of the crisis.