Scotland could lose out on billions of pounds following the EU bank’s decision to cut off funding for the UK.

The European Investment Bank (EIB), who have financed more than £3billion in Scottish public projects over the past decade, have put a freeze on new long-term loans.

The decision is in the wake of the UK Government’s triggering of Article 50 in March after the vote on Brexit last year.

The bank – owned by the EU’s 28 member states – have loaned nearly £200million for a new hospital in Dumfries and Galloway and the Edinburgh Sick Children’s Hospital.

They have also invested £150million in the M8/M74/M73 improvements and £250million in the Aberdeen bypass.

Labour MP Ian Murray said: “The lack of clarity over the future of the European Investment Bank is typical of this Government’s piecemeal approach to Brexit, which is causing unprecedented levels of doubt and uncertainty across every sector of our economy.

(Image: PA)

“Scotland has benefited enormously from the EIB, receiving over £3billion in direct financing over the last decade alone. This has included record support for Edinburgh University and vital funding for Scottish hospitals, colleges and major transport projects.

“The Government’s refusal to provide any assurances over future access will undermine business confidence and jeopardise future projects, and the moratorium the EIB have imposed could lead to further delays and escalating costs.

"It’s time the Government stopped dithering and acted decisively to ensure that businesses and infrastructure projects in Scotland and across the UK can continue to benefit from EIB support – both now and in the future.”

The EIB’s first loan to Scotland was £25million in 1974 for building Peterhead power station in Aberdeenshire. The Scottish Government says Brexit is a “huge threat” to our economic future.

A spokesman said: “The European Investment Bank has been an important source of funding for major NPD ­(non-profit distributing) projects.

“All such projects have already been developed or reached financial close and are not affected by the reported moratorium.

“The foundations of Scotland’s economy remain strong. However, we’re doing all we can to mitigate the UK Government’s stance on Brexit, which presents a huge threat to prosperity in Scotland.”

The EIB said: “Loan contracts already signed for UK-based projects remain valid.

“For as long as the UK remains a member, we continue our activity in the UK.

“However, in view of the circumstances, the EIB Group have to carry out careful due diligence for operations maturing after 2019.”