SCOTLAND'S transport body “abandoned” its right to veto decisions over Holyrood's £500m grant to Edinburgh trams shortly after Alex Salmond's first government had a move to quit the botched project defeated by parliament.

Edinburgh Tram Inquiry: Chief admits he didn't know who was in charge

The Edinburgh Tram Inquiry before Lord Hardie heard from Transport Scotland rail director Bill Reeve that in 2007 "the government of the day had proposed the cancellation of the project, the parliament proposed that it should be continued".

Above: Lord Hardie, chairman of Edinburgh Tram Inquiry

The minority SNP government moved to distance itself from the troubled project shortly after Transport Scotland had taken a different approach in a similar joint project also involving Tie - Transport Initiatives Edinburgh, the firm set up to deliver projects like the trams - in which it stepped in to take back control of a rail project in Stirling after costs there doubled to £85m and ran more than two years late.

Edinburgh Tram Inquiry: Chief admits he didn't know who was in charge

Tie was taken off the project for the Stirling, Alloa and Kincardine railway by Transport Scotland in which it was a partner with Clackmannanshire Council.

Jonathan Lake, senior inquiry counsel, described the two approaches by Transport Scotland as he questioned Mr Reeve, who said that "the concerns were different in nature to the ones seen in the trams project".

Edinburgh Tram Inquiry: Chief admits he didn't know who was in charge

He added: "The tram project was exactly the sort of project that Tie had been set up to deliver whereas the Stirling Alloa Kincardine project was an add-on and there was also some advantages to not have Tie distracted by other heavy rail infrastructure specialist projects."

Edinburgh Tram Inquiry: Chief admits he didn't know who was in charge

Mr Lake also said when it distanced itself from the tram project that it was "Transport Scotland abandoning any say that it has or any control that it has to veto the changes these arrangements".

Mr Reeve said: "That’s Transport Scotland giving effect to the decision that had been taken that the arrangements should be clarified to make the lead role the responsibility of City of Edinburgh Council."

Edinburgh Tram Inquiry: Chief admits he didn't know who was in charge

He also said: "There was a process of discussion between Transport Scotland officials and ministers at the time and a decision was taken that Transport Scotland should distance itself from the day to day management of the project."

The hearing also heard that a Transport Scotland employee's memo from June 2007 cast doubts over the information Audit Scotland had partly based its earlier mostly positive conclusion on the project.

The inquiry continues.