The Scottish Government has categorically denied holding up the demolition of the fire-hit Lundin Links Hotel.
The body says it has no objections to bringing down the building, which has been left in a hazardous state and is in danger of collapse.
And it claims the liquidator has sole responsibility for making arrangements.
The former hotel was already derelict when it was engulfed in flames on August 18.
But it is now so dangerous the main road through Lundin Links must remain closed until it is demolished.
The Scottish Government is the main creditor of liquidated company Kapital Residential, which previously owned the C-listed building.
And, according to liquidator Claire Middlebrook, it has to agree to demolition arrangements.
‘No objections to the building being brought down’
Ms Middlebrook told a packed public meeting this week that despite being in daily contact with officials, they had yet to confirm their position.
However, the Scottish Government has hit back, saying: “It is categorically untrue to claim that the Scottish Government is delaying demolition of this building.
“Arrangements for demolition are the sole responsibility of the liquidators.
“They asked for our views on August 22 and we replied the same day, stating unequivocally that we have no objections to the building being brought down.”
North East Fife Liberal Democrat MP Wendy Chamberlain said she had submitted a freedom of information request asking for all correspondence between the parties in a bid to get to the bottom of the row.
“None of this is helping to move things forward, which is what the community want to see now,” she said.
“It’s certainly not the collaborative approach the liquidator stated was needed to secure a swift resolution to the future of the site.”
Fife Council served a demolition order last week, giving the liquidator until September 12 to start work to clear the site.
And all work must be complete by October 10.
Questions continue over £850,000 loan
Meanwhile, questions remain over an £850,000 Covid Recovery Loan provided to Kaptial Residential by the Scottish Government.
The developer secured the loan on the Lundin Links Hotel and another building in Alloa.
It then sold the Alloa building, meaning it was secured solely on the Fife site.
And it repaid just £150,000 before going into liquidation.
Ms Chamberlain said: “There are two issues here.
“One is ensuring the building is demolished as soon as possible and getting the road open again.
“The other issue is the loan and why the Scottish Government gave £850,000 to a company that had not filed its most recent accounts.
“We also have to ask how it went from two sites to one. There’s no way that Lundin Links site was worth £850,000.”
Measures to recover outstanding money
The Scottish Government has insisted it conducted due diligence checks on Kapital before approving its application.
And in a letter to Wendy Chamberlain two weeks before the fire, housing minister Shona Robison said officials would take “all reasonable measures to recover the outstanding balance.”
Kapital Residential was one of 38 housebuilders to receive money from the SME liquidity fund during the pandemic.
The fund was set up to provide urgent support to small and medium-sized housebuilders during “intense difficulties” for the sector.
And the aim was to ensure homes continued to be delivered during lockdown.
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