ALEX Salmond was last night facing the first split in the SNP ranks since taking office, with ministers and MSPs at odds over the possible mutualisation of Scottish Water.
The SNP has always been strongly against the mutualisation of Scottish Water, which would see the authority become semi-detached from government, allowing it to borrow money from the private sector.
The Nationalists felt this would be a stepping
stone to privatisation, so have traditionally opposed the idea, even though it could free up £180 million a year for the Scottish Government to spend elsewhere.
But now the party appears split on the issue, with the First Minister's official spokesman stating that ministers had an "open mind".
"We have an open mind about alternative public-sector models, and we are keeping that under review," he said. "Mutualisation is one possible model."
The spokesman made that comment just after Stewart Stevenson, the minister who is responsible for Scottish Water, told MSPs he was happy to review the status of the authority, but he added: "I'm not intending that we head towards mutualisation."
With two different messages coming out of the Scottish Government, there was total confusion at Holyrood yesterday over the SNP's attitude towards the matter.
Even Mr Salmond, when pressed on the subject at First Minister's Questions, failed to say whether or not he was in favour of mutualisation.
The First Minister said there were reasons why the SNP was sceptical about mutualisation, but he also raised the prospect of some kind of change in the next spending round, after 2011.
It is understood that both Mr Salmond and John Swinney, the finance secretary, do see the benefits of mutualisation because it would give them more money to spend on their priorities. But they do not want to go anywhere near privatisation and would only countenance mutualisation if it maintained Scottish Water's status in the public sector.
Senior SNP sources have also raised the possibility of mutualisation being included in the party's manifesto for the 2011 Holyrood elections.
But against this is the traditional, left-wing view, held by many SNP back-benchers, who are determined to see Scottish Water remain wholly in the public sector as an arm of the Scottish Government.
The First Minister is trying to juggle these two contradictory approaches, which is why there appeared to be so much confusion at the heart of government yesterday.
The full article contains 409 words and appears in The Scotsman newspaper.
