Lorna Slater is under mounting pressure to explain whether a £9m loan made to Circularity Scotland will be paid back if the recycling firm collapses.
The Scottish National Investment Bank, which is funded by taxpayers, handed the cash to the not-for-profit firm as it prepared to launch the deposit return scheme (DRS).
But Circularity Scotland was yesterday forced to call in administrators as it teeters on the verge of collapse.
It was set-up to oversee the DRS, the Scottish Government's flagship recycling scheme, but faces an uncertain future after the recycling policy was shelved this month.
Slater, the minister in charge of implementing the scheme, was unable to say whether the £9m loan will be recoverable if Circularity Scotland goes bust.
Willie Rennie, the Scottish Lib Dems economy spokesman, said: "This is an extremely difficult time for Circularity Scotland staff, whose jobs are at stake because our two governments are incapable of working with one another.
"The £9m loan from the government-backed bank raises serious questions about whether that money would be lost in the event of its collapse, adding taxpayers to the long list of people left out of pocket by the chaos wreaked by the Scottish Government.
"Staff need to know if they will be paid. Taxpayers also need answers on the amount outstanding on the loan and whether any of that debt can be recovered in the event of administration."
Asked what will now happen to the cash from the investment bank, Slater told BBC Radio Scotland: "The Scottish National Investment Bank is independent of the Scottish Government, so that isn’t something we have any sort of say in.
"The investment decisions of the Scottish National Investment Bank are for them, they are independent of Government and they make their own decisions about that investment."
The chairman of the bank today conceded the full £9 million loan given to Circularity Scotland could be lost as the firm enters administration.
Willie Watt told MSPs today a "significant" sum of the loan could be lost.
He said: "We don't know exactly what that impact will be. But I think it's fair to say there will be significant losses on the loan that we have made to Circularity Scotland and we will report those losses once we know what they are.
"I'm sure that the losses will be in excess of over 50%, but I hope that they are less than 100%."
But when asked by Conservative MSP Graham Simpson if the whole £9 million could be lost, Watt conceded: "Yes, we could. That is the truth."
The bank boss denied that Scottish ministers influenced the investment bank's decision to fund Circularity Scotland, adding: "We make all of our decisions totally independent of the Scottish Government. We are a fiercely independent institution."
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