Scottish farmers were paid £40m in subsidies over and above what they were entitled to - and against the advice of civil servants, it was claimed yesterday.

It is alleged that European rules governing payments to farmers were bent to allow the payments in advance of the Scottish parliamentary elections earlier this year.

Ross Finnie, then rural development minister, awarded the £40m to Scottish farmers to avoid severe cashflow problems arising from a change in the date when payments under a European Commission funding scheme are made.

It is claimed he said in January that the money was "not additional" but was merely an advance on the European cash which is due to be paid in January 2008.

However, an investigation by the Sunday Herald revealed that the £40m will not be deducted from the £61m of European money to be paid in the new year.

Mr Finnie, who was demoted to the opposition benches following the SNP victory in the May poll, claimed over the weekend that he had done nothing wrong.

The allegations centre around grants issued under the European Less Favoured Area Support Scheme (LFASS).

Every spring, in April or May, around 13,000 farmers in Scotland receive £61m from LFASS. However, a change in regulations meant that, instead of receiving their cash in May 2007, farmers would have to wait until December or even January 2008 before the payments are made.

As a solution, Mr Finnie approved the £40m payment to bridge the eight-month gap and to help farmers avoid cashflow problems. Documents from the former Scottish Executive seen by the Sunday Herald show one official thought the payment would constitute "gross overcompensation", while another said it would fall foul of European rules.

Initially, it is claimed, the plan was that the £40m would be deducted from the £61m when it was finally paid by Europe. However, it has now emerged that when the £61m is forthcoming all of it will go to farmers, effectively rendering the £40m payment an unscheduled bonus.

Mr Finnie denied the extra payment was a pre-election bribe. He said: "That was not in my brain anywhere. I was concerned to smooth out that payment gap."

It is not yet clear how the £40m will affect the spending of other government departments. Sarah Boyack, Labour rural affairs spokeswoman, is now demanding to know where the money came from.

A spokesman for the Scottish Government said: "Under the old system the last payment was made in May 2006 and the next payment under the new system was not going to be until January 2008.

"The one-off payment of £40m issued under LFASS in January 2007 was because the cycle of payments had shifted by eight months."