POLICE Scotland have dropped their inquiry into Jo Swinson’s election expenses after being “unable to establish criminality” involving the deputy LibDem leader.

The East Dunbartonshire MP was reported to the force in November after questions were raised about a possible breach of her campaign spending limit at the 2017 general election.

The conclusion of the investigation removes a significant obstacle to the former equalities minister replacing Sir Vince Cable as UK leader of the LibDems.

A police spokesperson said: “Police Scotland has been unable to establish criminality and is concluding enquiries."

The LibDems welcomed the development and said Ms Swinson had been a victim of "SNP smears".

After losing East Dunbartonshire to the SNP in 2015, Ms Swinson regained the seat in one of the hardest fought contests of last year.

However The Herald then reported she had scraped in £210 below the legal spending limit only after almost £7000 of costs were disregarded.

Despite the intensity of the fight, Ms Swinson declared £2700 of leaflets and other material bought by her party went undelivered and so didn’t count toward her legal spending limit.

Her official candidate return said more than 93,000 items were never used, including around 26,000 copies of her main 4-page colour newsletter, the East Dunbartonshire Standard.

She denied any wrongdoing, but the SNP said at the time that voters would find it “hard to believe” that so much cash could have been spent on leaflets that were never used.

Around £4000 of costs were omitted on the basis they were “national” spending, meaning they promoted the LibDems in general, rather than Ms Swinson as the local candidate.

Various leaflets were split 50:50, 75:25, 67:33 or 33:67 in respect of local and national totals.

Despite having a large HQ in Edinburgh, the Scottish LibDems claimed some staff at Ms Swinson’s office in a Milngavie business park were working on its national campaign.

Ms Swinson said 30% of her staffing and office costs were national, lopping £1500 off her bills.

Electoral Commission guidance says that “if the main purpose of activity in the office becomes promoting the candidate, the full costs of the office…should be reported as candidate spending”.

No other candidate in East Dunbartonshire split their spending on national and local lines.

Ms Swinson declared she spent a total of £14,409 out of a maximum £14,619, while the SNP's John Nicolson spent £10,140.

It is an offence punishable by a year in prison to knowingly submit a false spending return.

After winning the seat with a 5339 majority, Ms Swinson, 38, became deputy LibDem leader, and is now favourite to succeed Sir Vince as leader.

She told Sky News on Sunday there was “no vacancy at the moment”, but added: “At the time that Vince does step down then absolutely I’ll take a view at that point.”

Sir Vince has yet to put a date on his departure but suggested it would be before 2020.

A Scottish LibDem spokesperson said: “Instead of having the good grace to accept the election result, the SNP have shown a remarkable lack of respect for the choice that people in East Dunbartonshire made at the general election last year.

“This crusade has been nothing more than sour grapes and the police statement confirms that there is no evidence to support these SNP smears.

“We look forward to the swift conclusion of this investigation.”