New row over private hospital rescue plan

Labour renewed its attack on the Government yesterday over state aid to the collapsed £180m Health Care International hospital in Clydebank after it emerged that ministers are to grant up to £4.4m to a company poised to take over the private hosp ital.

A leaked letter from the Scottish Office revealed that ministers agreed to make the money available to the Abu Dhabi Investment Company, which the receiver said earlier this month is the "preferred bidder" for the hospital, after the Abu Dhabis threatened to withdraw their offer. Labour angrily accused the Government, which granted up to £30m of public funds to the hospital's original American backers, of "throwing good money after bad".

HCI went into receivership last November just five months after it opened.

George Robertson, the shadow Secretary of State for Scotland, called for an immediate public explanation of the Government's "indefensible decision" to "throw more money down the HCI drain."

Alex Salmond, the leader of the Scottish National Party, called on Ian Lang, the Scottish Secretary, who has consistently argued that state aid for the project amounted to little more than £15m, to resign. The letter reveals that up to £22m of regional selective assistance was advanced to HCI.

"Mr Lang has been economical with the truth and profligate with Scotland's finances," Mr Salmond said.

A spokesman for Mr Lang said yesterday that the £4.4m grant was part of the initial £22m of regional aid. If the Abu Dhabi Investment Company met HCI's original financial projections and created around 800 jobs in the depressed local economy, the companywould qualify for the assistance. "This is not new money. It has always been there for those who fulfil this project," he said.

The HCI affair, which began in September when the state-of-the-art hospital announced it had attracted only a handful of the wealthy foreign patients it needed to survive, has been a source of acute embarrassment to the Tories north of the border.