Martin McGuinness has called for Northern Ireland’s First Minister Arlene Foster to step down, warning the region is “facing a serious growing political crisis”.

The Sinn Fein politician, who serves as Northern Ireland’s Deputy First Minister, made the comments amid an ongoing scandal over allegations Ms Foster was responsible for a flawed Stormont scheme that saw £140m of public money misspent.

The Renewable Heat Incentive scheme, known as RHI, was launched in 2012 with a view to encouraging Northern Irish businesses to use renewable forms of energy. However, a serious flaw in the implementation meant that businesses were given a financial incentive to burn resources pointlessly instead. The scheme, known locally as “cash for ash”, meant one farmer was allegedly able to secure £1m of public funding to needlessly heat a shed for 20 years.

The allegations have come to light after a whistleblower approached local media. Ms Foster, who replaced Peter Robinson as DUP leader in January 2016, was head of the department responsible for running the scheme and has subsequently faced calls to stand down after the claims emerged in November of last year.

In December, her DUP colleague Jonathan Bell broke party ranks to speak out against her, telling local media that Ms Foster ordered Stormont staff to alter documents to reduce her responsibility for the scheme’s failures. She denies the accusation.

The left-wing nationalist party SDLP put a no-confidence motion against Ms Foster to MLAs at Stormont. However, the motion failed.

In a New Year’s message, Mr McGuinness said Ms Foster should step aside as First Minister in order for an inquiry to take place. He said: “There is also no doubt that we are facing a serious growing political crisis in the North as public confidence in the political institutions has been grievously undermined by the Renewable Heat Incentive debacle and the DUP’s failure to deal responsibly and adequately with it.

“In order to address these challenges the DUP and its leader Arlene Foster need to accept there is an overwhelming desire in the community to deal with this issue and for Arlene Foster to step aside as First Minister pending a preliminary report.”

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The politician, who represents the Foyle constituency, continued: “That would allow for an independent investigation to take place, which is transparent, robust, time-framed and led by an independent judicial figure from outside this jurisdiction appointed by the Attorney General. A rigorous process to recoup as much of the money as possible must also be put in place.

“We need to restore public confidence in the credibility of the political institutions, ensuring they deliver for the people.”