The European Commission has been asked to investigate the creation of a charitable trust to run Scotland's largest civic art collection and leisure facilities following claims made by a whistleblower.

The EC's competition commissioner, Neelie Kroes, has confirmed that concerns raised about Culture and Sport Glasgow through a Scots MEP could "indicate a potential breach of state aid rules".

Ms Kroes has also raised the issue of a potential abuse of public tendering rules with Charlie McCreevy, the commissioner responsible for the internal market.

The commission has now written directly to the Scottish Executive regarding issues raised by Struan Stevenson, following allegations made by a whistleblower the Tory MEP believes is a senior Glasgow City Council official.

It claims Glasgow is attempting to circumvent European legislation by transferring its culture and leisure facilities to an arm's-length trust without putting the running of the service out to tender.

The Competition Commissioner responded by claiming that the concerns, if proven, could show that Glasgow is directly or indirectly subsidising a company, which is contrary to EC rules.

Concerns were also raised by Mr Stevenson's whistleblower about the accountability of the trust, with questions raised about the future of its assets.

But Glasgow City Council has robustly defended the creation of the trust and insists the complaints have no foundation. A joint response by the city council and the Scottish Executive refuting the allegations is expected to be sent to Brussels in the next day or so.

In her letter to Mr Stevenson, Ms Kroes states: "From the perspective of the EC competition rules, your constituent's concerns could indicate a potential breach of State aid rules under Article 87 and 88 of the EC Treaty.

"I have asked my services to contact the UK authorities in order to gain a more detailed understanding of the issue. On this basis we will examine the issue carefully and will take any other steps which may prove appropriate."

An EC spokeswoman added: "The commission wrote to the UK authorities April 10th. In the light of their reply, the commission will decide whether or not to open an inquiry. It is far too early to speculate whether there is indeed illegal state aid in this case."

Mr Stevenson said: "In my experience it is virtually unprecedented for a double investigation to be launched by the European Commission. It certainly indicates they are taking the matter very seriously indeed."

The commission's involvement is the latest hurdle in a troubled birth for the trust, which supporters claim will net an additional £6m a year through business tax exemption, as well as having the potential to generate additional fundraising revenue.

They also point to the success of similar operations south of the border, which have revitalised the former culture and leisure departments of some local authorities.

Opponents have so far sought, unsuccessfully, a judicial review of the trust, which formally comes into being on June 1, while opposition politicians in Glasgow are promising to scrap it if elected.

Last night a city council spokesman said: "We are entirely satisfied that the claims made in an e-mail to a Member of the European Parliament are factually inaccurate and there is no breach of commission rules.

"The point raised that the city council is transferring its cultural and leisure facilities over to private companies and trusts is not the case - a charitable company has been created to manage and develop these facilities."

It is understood the executive officials working on the response are broadly sympathetic to Glasgow's position, but are unable to elaborate on the details until a new administration is in place.

An executive spokeswoman confirmed they had received correspondence.