The justice minister has demanded an inquiry after a prisoner was released in error at a court.
McCormick was released in error from Hamilton Sheriff Court
James McCormick, 17, from the Cardonald area of Glasgow, had killed a teenager in the city last year and was set free from Hamilton Sheriff Court.
Prison officials said he could pose a threat to the public and should not be approached.
McCormick knifed 17-year-old Thomas Loughrey in the Pollokshaws area of Glasgow on 27 July, 2003.
The prisoner was due back in court and was being transferred by private security firm Reliance, which took over the contract for the transport of offenders on Monday.
It was not clear why he had been due back in court, or what happened there, but Reliance confirmed it was responsible for transferring McCormick.
A spokesman for Reliance said: "A prisoner was released in error at Hamilton Sheriff Court earlier today.
"We immediately notified officers of Strathclyde Police who were present in the court.
"We also notified the Scottish Prison Service and are co-operating fully in resolving this situation."
A prison service spokesman said: "Police have been notified and are investigating. It is believed that McCormick may pose a danger to the general public."
Justice Minister Cathy Jamieson said: "It is a matter of grave concern. I have demanded an immediate and detailed report from the chief executive of the Scottish Prison Service - who monitors this contract with Reliance - into how this happened.
"Our top priority is the protection of the public. The police are now on the case to ensure the quick and effective return to custody of the prisoner concerned.
"SPS staff have taken steps to ensure that the family of the prisoner's victim are alerted."
However, the justice minister said she accepted that the incident could damage public confidence.
She said: "I expect those responsible to recognise that and take any and all necessary steps to sharpen up their act and improve performance - before this service is rolled out further."
Thomas Loughrey died from his injuries
James McCormick was found guilty of the murder of 17-year-old Thomas Loughrey in December 2003.
He left the teenager to die in the street after stabbing him three times outside a police station in Pollokshaws Road, Glasgow.
Thomas had intervened after seeing McCormick assault his girlfriend, Louise Carswell.
McCormick was jailed for a minimum of 15 years but smirked and winked at Thomas' family as he was sentenced.
The judge at the High Court in Kilmarnock branded him "an animal".
A Scottish Prison Service spokesman revealed that McCormick was beaten up by fellow inmates hours after arriving at Polmont Young Offenders Institution, near Falkirk, to begin his sentence.