MEMBERS of Strathclyde Passenger Transport Authority were assured yesterday that it was unlikely they would be surcharged in connection with #1.3m in European Union grants that were wrongly claimed for transport projects and are having to be paid back.

The assurance came as former SPT chairman Councillor Charles Gordon complained bitterly about having been ''materially and substantially misled'' by a report written by ''very senior and highly paid professional staff''.

He was speaking at an SPT meeting which had just considered a report of an investigation into the affair by a Convention of Scottish Local Authorities consultant, Mr Sam Craig, which concluded that the quality of the accountability and management applied to the issue of the European Development Fund grants was ''significantly below the standard that could reasonably have been expected of an organisation such as Strathclyde Passenger Transport Executive, which received the major part of its income from public funding''.

One official is currently under suspension in connection with the matter and yesterday SPT secretary John Anderson emphasised that the issue of ERDF funding involved officers who were previously directors of the SPT executive before local government reorganisation in 1996, as well as officers who were currently employed by the present executive.

Mr Anderson said: ''I think the authority should give a direction to the executive to look at possible areas of investigation to see whether there is any liability falling on individual officers which may be dealt with through disciplinary action.''

Strathclyde Transport has already agreed that the #1.3m should be paid back from reserves, rather than seeking additional funding from the 12 councils of the SPT area, or by putting up fares. However, the SPT is seeking compensation from its auditors in respect of the loss. It is also hoping that its insurers will pay up, although there is less confidence of success with this option since the crisis was triggered by an internal error.

Mr Gordon wanted to know where elected members stood in relation to the loss. He said: ''We've been told by Mr Craig that some of us were members of a predecessor authority when somebody very senior wrote a report where we were materially and substantially misled on the facts of the situation. The direct consequence of that misleading has been a financial penalty being imposed on the authority.

''I think we've seen recent events in local government where there's been something of a feeding frenzy about where the line of accountability stops in this situation. Suffice to say I've got a clear conscience about all this, but I'm seriously disappointed to hear nearly five years after the fact that I was party to a decision which was an incorrect decision.

''It was a very complex matter, and apparently very senior staff, very highly paid professional staff, who had a responsibility to advise members on very complex matters, actually misled us.''

The crisis arose out of contracts before local government reorganisation in 1996, which breached EU procurement rules. In some cases, this amounted to failure to advertise the work in Europe and, in others, work fell outside project dates set by the EU.

The bulk of the grant money related to the modernisation of Buchanan Street bus station in Glasgow, and the development of Hamilton bus station.

Ironically, it was the SPTE that blew the whistle on itself. As part of the claim process, officials had to sign certificates saying that European rules had been complied with.

However, they discovered that was not the case and asked the Scottish Office verification team to investigate.