A GROUP of SNP councillors have complained of being "kept in the dark" after their local authority snubbed a deal with a Chinese firm that went on to sign an agreement with Nicola Sturgeon.

Falkirk Council was approached by a representative of China Railway No 3 Engineering Group (CR3) with a proposal to build an affordable housing scheme late last year, but it was knocked back due to fears the plan would break procurement rules.

There were also concerns at proposals to construct homes largely in China, before shipping them across the world meaning the project would not benefit local tradesmen and business.

The firm went on to sign a Memorandum of Understanding (MoU) with the Scottish Government last month, but SNP councillors have reacted angrily to the revelations and demanded "immediate answers".

In a letter to the Falkirk Council Chief Executive, SNP group leader Cecil Meiklejohn said "serious questions have to be asked with regards to the openness, transparency and ethos" if decisions had been taken without consultation with opposition councillors. Falkirk Council is run by a Labour-led coalition.

He added: "It is totally unacceptable for opposition SNP members to read in the press such announcements without even the courtesy of any contact what so ever from the administration leaders or council, officials.

"This can not go unchallenged and I am demanding a full explanation as well as the an audit of the links to China by both Falkirk Council elected representatives and officers of the council before we decide whether this matter should be brought to the attention of Audit Scotland."

The SNP group claimed that delegations to China, including senior council officials and councillors, had taken place with no explanation of their purpose or outcomes.

However, the First Minister has also come under fire for a lack of transparency, and faced further calls to release documentation detailing the discussions that led to the MoU being signed with CR3 and a second company, Sinofortone.

The deal, which opens the door to £10bn of investment in infrastructure, has come under scrutiny after the Scottish Government did not reveal its existence, with it only coming to light following reports in China. It has also emerged that the parent company of CR3 has been blacklisted by Norway's oil fund after its ethics council concluded that there is an "unacceptable risk that the company is involved in gross corruption".

Ms Sturgeon has previously insisted that talks were at a very early stage and that no firm proposals were on the table. However, an advisor to the firms has spoken publicly of specific plans for housing projects in Falkirk, Edinburgh and Ayrshire.

It has also emerged that the Scottish Government stepped in to broker talks between Sinofortone and Falkirk Council, after the authority rejected the CR3 approach. The Government participated in talks where specific sites were discussed.

Willie Rennie, the Scottish Liberal Democrat leader, described the latest revelations as "shocking". He said: "Nicola Sturgeon told us, absolutely, that this was just a simple MoU with no detailed discussions and everything was at a very early stage.

"Now we discover the opposite. There were detailed plans, detailed discussions, and the Scottish Government knew this all along. The First Minister needs to justify why she said what she did and we believe the agreement should be shredded because there are concerns not just over what the First Minister said but also corruption at the China Railway Group."

He added: "The Scottish Government should be open and transparent because this is such a big deal with such significant consequences for the reputation of Scotland. The refusal to make public these documents indicates that [the Government] is concerned about their contents and what people might think of them. That's even more of a reason why they need to be made public."