The SNP’s treasurer has quit after being arrested by police investigating the party’s finances.

Colin Beattie, who is also a member of the Scottish Parliament, said it was “the right decision to avoid further distraction” to the work of party leader Humza Yousaf.

The 71-year-old was questioned by detectives yesterday as part of their probe into claims that £660,000 raised by the SNP to fight another independence referendum has been mis-spent.

He was released last night without charge, pending further investigations.

Beattie’s arrest came just two weeks after Peter Murrell, the SNP’ former chief executive and the husband of Nicola Sturgeon, was also taken into custody by Police Scotland.

He was also released without charge after being questioned for 11 hours.

In a statement, Beattie said: “This afternoon, I informed the party leader that I will be stepping back from my role as SNP national treasurer with immediate effect.

“I have also informed the SNP chief whip at Holyrood that I will be stepping back from my role on the Public Audit Committee until the police investigation has concluded.

“On a personal level, this decision has not been easy, but it is the right decision to avoid further distraction to the important work being led by Humza Yousaf to improve the SNP’s governance and transparency.

“I will continue to co-operate fully with Police Scotland’s inquiries and it would be inappropriate for me to comment any further on a live case.”

Beattie was originally SNP treasurer between 2004 and 2020 before being replaced by Douglas Chapman MP.

He returned to the role in 2021 after Chapman resigned, claiming he “had not received the support or financial information required” to carry out his duties.

As well as being leader, Yousaf is now the SNP’s interim treasurer until a full-time replacement can be found.

It was reported at the weekend that Beattie had told a meeting of the SNP’s national executive council that he was “having difficulty balancing the books” after the party lost 30,000 members and several big-money donors.

However, the party has insisted that it is not running out of cash.

The police investigation, called Operation Branchform, was launched following allegations that the £660,000, which was meant to be in a ring-fenced fund, had been misappropriated. The party has denied any wrongdoing.

It emerged in December that Murrell – who was chief executive for more than 20 years – had loaned the SNP £107,620 to help with “cash flow”.

The party has been engulfed in turmoil ever since Sturgeon’s surprise resignation in February.