Scottish ministers gave a Dundee engineering firm “significant financial support” shortly before it fell into administration.
The Gallow Group announced its collapse on Monday with the loss of 161 jobs immediately.
Paul Wheelhouse, the Scottish Government’s Business Minister, has now revealed the firm received financial support for several years to try and keep it afloat.
The Courier understands local politicians also lobbied governments north and south of the border to buy time for the business, providing “a substantial amount of help” to keep it going.
Mr Wheelhouse said: “I am very disappointed to learn that Galloway Group, Dundee, has entered administration. This will be an extremely difficult time for those affected, their families and the local area.
“The Scottish Government, Scottish Enterprise and the Scottish Investment Bank have been engaging intensively with Galloway Group for a number of years, providing significant financial and business development support to try to help secure a sustainable future for the business.
“Last month, I visited the company to make clear the ongoing support for the company and its employees from the Scottish Government and its agencies.
“Sadly, despite our support, it has ultimately not proved possible to keep the company from entering administration, but Scottish Enterprise will remain closely engaged with the company and the administrators, to explore all possible support for the business and jobs in Dundee.”
The firm produced metal parts for the offshore industry and other businesses.
Mr Wheelhouse also confirmed the Scottish Government’s initiative for responding to redundancy situations, the Partnership Action for Continuing Employment (PACE), has organised a multi-agency meeting for next week to support those individuals affected.