MSPs have voiced concern over a lack of transparency regarding public money given to the struggling BiFab yards.
Members of Holyrood’s economy, energy and fair work committee said greater accountability and openness is needed when ministers invest in ailing firms.
The Scottish Government has said it is committed to the “sound and transparent management of the country’s finances”.
The committee is investigating what when wrong at BiFab, which has yards in Methil and Burntisland as well as one on Lewis.
The Scottish Government invested almost £40 million of public money and became a minority shareholder.
It provided a further £15m loan to help BiFab tender for work.
But the company failed to win contracts to build wind turbine jackets for developments off the Fife and Angus coast.
The committee described BiFab’s failure as a “huge blow” to workers and local communities.
It said it was a concerning reflection of the ability of Scottish businesses to benefit from the offshore wind industry.
Part of the inquiry’s remit was to scrutinise the Scottish Government’s actions and determine what investment, guarantees or loans were made and when.
However, MSPs heard conflicting evidence from the Scottish Government and DF Barnes.
Despite repeated requests, neither party shared the pre-acquisition business plan.
The committee also explored why BiFab failed to gain contracts from recent offshore wind projects in Scotland.
It heard the consequences of EU state aid regulations may have disadvantaged the company to the benefit of state-owned enterprises in Europe and the far east.
Committee convener, Conservative MSP Gordon Lindhurst, said: “The committee is extremely concerned by the lack of transparency on the part of both DF Barnes and the Scottish Government over their decision-making and use of public funds.
“Both cited the pre-acquisition business plan as corroboration of their position but despite repeated requests neither shared this business plan with the inquiry.
“The financial loss to the public purse of BiFab failing as a company demonstrates the need for greater accountability and transparency, and for the government to set out its overarching policy on strategic investment in failing companies.”
Labour MSP Claire Baker said the committee had revealed a “sorry state of affairs” for Bifab workers and the Fife community.
“Neither the Scottish Government or DF Barnes come out the report very well, and the lack of transparency over deals done with public money is unacceptable,” she said.
SNP MSP David Torrance welcomed the fact the committee would now concentrate on the role of the UK Government.
“What’s important to remember is that if the Scottish Government had not stepped in with financial support to BiFab in 2017, hundreds of jobs at the time would have been lost and a contract would have been left unfinished in the Methil yard,” he said.
A Scottish Government spokesperson said: “The Scottish Government is committed to sound and transparent management of the country’s finances to deliver the best outcomes for the people of Scotland and to stimulate a sustainable recovery from the coronavirus pandemic.”
“We will consider the recommendations carefully and set out our response in due course.”