A report in our sister newspaper, the Sunday Herald has revealed accusations from the Forestry Commission that Highlands and Islands Enterprise (HIE) tried to hide multi-million pound problems plaguing the controversial Cairn Gorm mountain railway.

Last year negotiations in which the Forestry Commission were expected to take over the running of the Cairn Gorm estate broke down, leaving HIE as owners of the estate but internal documents from the Commission, released through freedom of information legislation, reveal that many of the facilities at the ski resort on the Cairn Gorm estate near Aviemore are badly in need of repair.

Buildings are leaking, sewage discharge limits are being breached and the train's undercarriage has not been properly checked because there is no lifting gear to remove the trains from the track.

The documents also reveal that bringing the facilities up to scratch could cost up to £2 million of public money. If the funicular railway was to close down it would cost £6 million to reinstate the land, and a £2.7 million grant from the European Union would have to be repaid.

Senior FCS official Hugh Insley said he was advised not to have any involvement with the ski area due to the "poorly maintained infrastructure on a highly designated area".

He told colleagues: "The difficult issue is how to cover ourselves against future costs and liabilities related to the ski facilities.

"There is a very real risk that in their haste to tie this up, they (HIE) are trying to sweep some potentially big liabilities under the carpet."

Insley was later advised to avoid "any involvement whatsoever with the ski area" by one of his negotiators, Alan Stevenson. "The political fall out is all HIE's affair as they don't have anyone else to talk to!" Stevenson wrote.

The negotiations were later complicated further by the precarious financial position of the CairnGorm Mopuntain Limited, the company that operated the funicular railway. The company was taken over by HIE earlier this year and debts, including a £1m loan from Highland Council, were wiped out.

"The exposure of these massive liabilities confirms our worst fears," declared Dave Morris, the director of Ramblers Scotland.

"This represents an incredible loss of public money on an environmentally damaging project. Lessons must be learnt from this scandal," he said. "Ownership of the Cairngorm estate must be removed from HIE because they appear to have seriously mislead the public and the parliament on the whole funding basis of the funicular railway."

Alan Blackshaw, a former senior civil servant who resigned as a director of the local enterprise agency because of the funicular in 2000, has called on Audit Scotland to investigate, suggesting that the railway could eventually cost taxpayers more than £60 million.

A spokesperson for HIE told us that tit was the agency's intention to attract a private operator for the funicular railway and to resume negotiations for the estate to move into alternative ownership."

TGO will feature a full report on the Cairn Gorm situation in the October issue of the magazine.