Humza Yousaf has been dealt a new blow as business minister Ivan McKee quits government after five years.

Mr McKee, who was appointed minister for business, trade, tourism and enterprise by Nicola Sturgeon, told The Herald that he had been offered a more limited brief and had decided to exit from the administration.

"I have just been to see to the First Minister. He offered me a smaller job. It was similar to what it was now, but with less responsibility.

"We didn't go into the specifics but it was broadly similar but without some of the responsibilities round about government transformation and some other work I've been doing. It was effectively a smaller job than I had just now and I have turned it down," he said.

GET THE LATEST HERALD SUBSCRIPTION OFFER  Subscriptions from HeraldScotland

"The relationship with business needs reset and I am not sure how this does that. I am the only person in government who had business experience.

"There is work to be done there [in government] and they need to have the scope to actually deliver on that remit."

Asked precisely why he was leaving, he said: "To be absolutely frank with you. It is immensely frustrating having to talk to businesses everyday and listen to their problems without have the ability to actually do anything about it."

Pressed on whether he felt the issues with business would continue under Mr Yousaf's government, Mr McKee said: "I will let the First Minister comment on that."

Asked later about Mr McKee's exit, the First Minister said: "I have many powers as First Minister, but compelling people to be in government is not one of them."

Mr McKee won The Herald's Politics in Business Award at The Herald's Politician of the Year Awards in November last year. 

Last month he acted as campaign manager for Ms Forbes at the start of her bid to become SNP leader. The MSP for Skye, Badenoch and Lochaber was narrowly defeated by Mr Yousaf in the leadership contest which ended on Monday.

READ MORE: Humza Yousaf names first cabinet minus SNP deputy leader Keith Brown

After she turned down the role of rural affairs secretary, a government source told The Herald that Mr Yousaf wanted a finance secretary who was absolutely “on the same page” as him, and the leadership campaign had shown that Ms Forbes was not.

One senior SNP insider said there was shock around the party in Holyrood for the party to lose two such senior figures with business experience from the government.

"Ivan was very action focused. He's the guy you stick him in the room, he will listen to problems, he will make sense of the situation, he's very sharp and intelligent and he will immediately say 'how can I solve that problem?" said the source.

"I remember how effusive Liz Cameron [chief executive of the Scottish Chamber of Commerce] - who let's face it can be quite critical of the Scottish Government - about Ivan when he won the Herald's award."

The insider added: "There is a huge sense of shock and disappointment that all the way through the leadeship campaign there was a constant theme that there needs to be a reset of business relationships, that came up at many hustings.

"But not only does it look like there will be no reset, there will be no recognition of the value of the value of the importance of that relationship."

READ MORE: Internal strife deepens as new First Minister makes changes

Before entering politics, Mr McKee, the MSP for Glasgow Provan, built a successful career in business. 

His resignation comes less than 24 hours after finance secretary Ms Forbes quit government after being offered the role of rural affairs secretary, a less prominent brief and one that would be regarded as a demotion from one of the highest posts in the administration.

The departure of the two people in charge of the government's finances is a massive blow to Mr Yousaf as he sets about taking charge of running the devolved administration. He must now appoint a new finance secretary and a new business minister as well has find a new health secretary to succeed him.

Mr McKee's and Ms Forbes's resignations also create further problems for Mr Yousaf as he attempts to heal divisions in the SNP.

READ MORE: Alison Rowat: Humza is already living down to expectations

The new First Minister had urged his defeated rival to move from finance secretary to the rural affairs brief in cabinet, which her supporters described as an “insult.”

Just hours earlier, after being confirmed as Scotland’s sixth first minister in a Holyrood vote, Mr Yousaf had insisted that he wanted Ms Forbes in his government.

Former cabinet secretary Alex Neil, who backed Ms Forbes in the leadership contest, said the offer of rural affairs was an "insult and not a real effort to unite" and called it a “poor start" for Mr Yousaf’s fledgling administration.

Highly regarded in the business community, Mr McKee, who was first elected to Holyrood in 2016, was appointed minister for business, trade, tourism and enterprise in May 2021. He was previously the minister for trade, investment and innovation. 

READ MORE: Business groups raise concerns over Ivan McKee exit from government

In his role as business minister his responsibilities were listed by the Scottish Government as supporting the cabinet secretary for finance and the economy. 

His specific responsibilities were listed as:

- public sector procurement and property

- business, industry and manufacturing

- retail strategy

- tourism and hospitality

- life sciences

- international trade and export policy

- Scottish Green Ports

- economy national challenge competition

- regional economic forums

- social entrepreneurship and employee-owned businesses

- financial services and FinTech

- digital economy, strategy, participation and connectivity (including 100% broadband and Connecting Scotland)

Before entering politics, he held a number of senior roles in manufacturing and business, managing companies in the UK as well as Poland, Finland, Croatia and Bosnia.

Early in his career, Mr McKee spent two years with VSO in Bangladesh. He is currently a trustee of the charity CEI, which supports education and health projects in Bangladesh.

He was brought up in Glasgow where he studied at the University of Strathclyde. He also studied at the University of Newcastle.

A spokesman for the Scottish Government said a news release would be issued when the ministerial team is announced.