Nicola Sturgeon is under increasing pressure to quit the SNP amid warnings that the party is facing financial ruin.
On Sunday, the former first minister was dragged deeper into the scandal engulfing the nationalists as claims emerged that police were investigating attempts to shut down scrutiny of the SNP’s finances.
There is a growing expectation inside the SNP that Ms Sturgeon, who planned to remain in Holyrood until at least 2026, will now quit as an MSP “sooner rather than later”.
Humza Yousaf, her successor, is facing demands to suspend her party membership if she refuses to walk away.
It comes as he was forced to deny that the party he inherited was “close to bankruptcy” after a stark warning was delivered to its ruling National Executive Committee (NEC) by its treasurer.
Colin Beattie, also an MSP, said an exodus of 30,000 members, a reduction in donors, and rising legal costs linked to the police investigation meant the party was “having difficulty in balancing the books”. He added: “We need to find money to keep the party going forward or we’ll keep cutting our tail until there’s nothing left.”
Ms Sturgeon will be absent from Holyrood when the Scottish Parliament returns from its Easter break on Tuesday, The Telegraph can reveal, and will participate in proceedings remotely.
She had previously insisted she would be an active backbencher until the next Scottish elections, more than three years away, focusing on issues such as climate change and child poverty. However, her spokesman refused to say when she would return to her £67,662-a-year job in person, fuelling speculation that she was preparing to quit politics.
The developments came after her husband, Peter Murrell, was arrested as part of a long-running police investigation into SNP finances.
A leaked video was published on Sunday, showing Ms Sturgeon angrily attempting to shut down scrutiny of the party’s finances at a March 2021 meeting of the NEC, as police were poised to launch their probe.
Jim Sillars, a former SNP deputy leader, said there was now “a big question mark” over Ms Sturgeon’s future, while a senior insider said they expected a Holyrood by-election in her Glasgow Southside constituency as early as the summer.
There are fears within the SNP that any contributions the 52-year-old makes as a backbencher would be leapt on by opponents to draw public attention to the SNP’s turmoil and the ongoing fraud investigation.
Ms Sturgeon’s spokesman insisted she still planned to remain as an MSP and had “always intended” to stay away from Holyrood this week in order not to distract from Mr Yousaf setting out his priorities.
However, a senior SNP source said: "At the end of the day, the chief executive reported to Nicola. I don’t see the advantages to her in staying.
"This pantomime will just run and run, and it will make life in the Parliament very uncomfortable for her.
“It won’t matter if she’s making a speech about potholes in Govan – the opposition will drag all this up any chance they get. There is a growing suspicion now that she will be stepping down sooner rather than later. Her whole reputation now is in tatters."
The leaked video showed Ms Sturgeon telling a meeting of the SNP’s ruling body in March 2021 that party finances had “never been stronger” and warning colleagues against suggesting there were “any problems” with cash.
However, weeks later Mr Murrell, then the SNP chief executive, loaned the party £107,620 interest free to address what the SNP previously described as “cashflow” issues.
Around the same time that Ms Sturgeon was allegedly privately attempting to shut down scrutiny, police launched a fraud investigation into the party’s finances, which earlier this month saw Mr Murrell arrested and the couple’s home searched by dozens of detectives.
Opposition parties at Holyrood leapt on the “frankly astonishing” contradictions between Ms Sturgeon’s statements to the NEC and later revelations and said Mr Yousaf must now suspend Ms Sturgeon and Mr Murrell from the party.
Police launched an investigation in 2021 after around £600,000 in donations, solicited from supporters for independence referendum campaigns that never happened, went “missing” from party accounts.
Following his arrest, Mr Murrell was released without charge pending further enquiries.
After her resignation, there had been speculation that Ms Sturgeon would take a high-profile international job, potentially with the UN, but her appeal to potential employers is seen to have nosedived.
“She said the finances were OK and got pretty angry that anyone should think any differently,” Mr Sillars said of the video of Ms Sturgeon addressing the NEC.
“If the finances were in the condition that she described, it raises the question of why shortly thereafter, an employee, who happens to be her husband, lent the party a very large and unusually specific amount of money.
“Peter ultimately was an employee of the party. As leader of the party, she had prime responsibility for the finances of the SNP. She claimed to have left the party in a very good condition, which turns out to be not the case. She has big questions to answer and there must be a big question mark over what the future holds for Nicola Sturgeon.”
Opposition parties said it was time for Mr Yousaf, who stood to replace Ms Sturgeon as the “continuity candidate” but has since tried to distance himself from her, to order the suspension of his predecessor and her husband from the SNP.
Should Ms Sturgeon lose her party membership, it would see her face potential humiliation by having to sit in Holyrood as an independent.
Craig Hoy, the Scottish Tory chairman, said: “For her to claim that the party’s finances were in rude health – a matter of weeks before a police investigation was launched into the missing £600,000 and her chief executive husband lent his own employers a six-figure sum to help with ‘cashflow’ issues – is frankly astonishing.
“If Humza Yousaf wants to show he’s determined to tackle the crisis within the SNP, he should suspend the party membership of Nicola Sturgeon and Peter Murrell.”
Jackie Baillie, Scottish Labour’s deputy leader, said it was clear that Ms Sturgeon had been “central to the secrecy” within the SNP.
“She has big questions to answer over her actions, and Humza Yousaf must consider suspending her party membership and that of her husband, former chief executive Peter Murrell, until the investigation has been concluded,” she said.
Asked to explain why Ms Sturgeon had insisted the SNP’s finances were in good health only for her husband to lend the party more than £100,000 weeks later because of “cashflow” issues, a party spokesman did not directly answer.
He said: “The SNP National Executive Committee agreed to a series of proposals to increase transparency in the SNP [on Saturday]. It is the case that the SNP accounts are published annually and are in order.”
A spokesman for Ms Sturgeon said: “Nicola Sturgeon made clear when she resigned as first minister that it is her intention to remain as the SNP MSP for Glasgow Southside, and that remains the case.
“In order to ensure the focus of this week is on the new First Minister setting out his priorities for the people of Scotland, Ms Sturgeon has always intended to participate remotely and intends to return to Holyrood in the near future.”
Responding to the calls for Ms Sturgeon’s suspension, the SNP spokesman added: “These calls are a sneak peek of what life under Labour would be like – no due process for anyone, just decisions taken on a whim by failed politicians.”
