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Last Updated: Thursday, 14 September 2006, 16:49 GMT 17:49 UK
McConnell's defence of Euro cash
Corran car ferry (Pic: Undiscovered Scotland)
The new Corran car ferry received European funding
First Minister Jack McConnell has vowed to fight any move by Europe to claw back 20m of aid paid out to the Highlands and Islands in the 1990s.

Auditors at the European Commission (EC) claim management weaknesses and ineligible spending in some projects.

Mr McConnell told the Scottish Parliament the executive would contest the claims "vigorously".

Last year, BBC Scotland learned that 37 projects were being reviewed by EC auditors.

The provision of a new car ferry at Corran, south of Fort William, was one of those affected.

It received 1.06m from the European Regional Development Fund.

Linking Corran with Ardgour, Morvern and Ardnamurchan, the new ferry replaced the 32-year-old MV Rosehaugh and the 1974-registered MV Maid of Glencoul, which alternated on the service.

Mr McConnell was answering a parliamentary question from Labour Highlands and Islands MSP Maureen Macmillan.

The investment in the Highlands then and now in structural projects has underpinned the growth of the economy and the strength of Highland communities
First Minister Jack McConnell

She said organisations in the region had received correspondence from the EC proposing that funds be paid back.

Mr McConnell said the money had been vital to the Highlands and Islands and it was unfair to be asking for money back so long after it had been granted.

He said: "The investment in the Highlands then and now in structural projects has underpinned the growth of the economy and the strength of Highland communities.

"We see no justification for the conclusion that Scotland should be fined today for actions which they claim took place in the 1990s when the devolved government needs money to invest in schools and hospitals, and tackling crime and growing our economy."

Mr McConnell said he would outline the position during a visit to the parliament by Danuta Hubner, commissioner for regional policy.

'Further negotiations'

MEP Alyn Smith accused the executive of failing to support the region when the issue first surfaced.

He added: "This time they must give them the fullest possible backing.

"If there are genuine problems then action must be taken but currently all we have are irregularities and missing paperwork.

"This situation must be clarified."

Highlands and Islands Enterprise Chief Executive Sandy Cumming said: "We do not accept that there are grounds for large sums of this money to be repaid and particularly welcome the first minister's intention to call on the backing of the UK Government to support our case.

"During the next few months there will be further negotiations with the European Commission regarding the audit findings as they relate to projects involving all the affected public sector organisations."


VIDEO AND AUDIO NEWS
Why the commission is demanding the payback



SEE ALSO
EC funding use inquiry extended
08 Feb 05 |  Scotland
Euro audit finds project problems
07 Feb 05 |  Scotland

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