Finance secretary John Swinney announced last night that the challenge - which has cost the taxpayer more than £100,000 - would no longer be pursued, on the grounds that information from the memo had already been leaked.
It emerged in April that the 2009 paper, compiled by the Scottish Government's economic advisers, had concluded there would be a funding gap of between £366 million and £396m if ministers decided to introduce a new local income tax (LIT) of 3p - larger than previous official estimates. This would rely on UK ministers handing the Scottish Government proceeds from council tax benefit paid out in Scotland.
Within weeks of the memo being sent, the tax reform pledge was dropped.
Mr Swinney's decision to wind up the Scottish Government's challenge brings to a close a lengthy legal process that began when a daily newspaper asked for the memo detailing the costs of LIT to be published, under Freedom of Information legislation.
That promp ted Mr Salmond's government to go twice to the Court of Session to stop the memo being published, after Scotland's Information Commissioner, Kevin Dunion, ruled the paper should be given access to the memo. The second legal bid was launched in March, just before Mr Dunion's deadline for releasing the document, and with the Scottish Parliament elections imminent.
• Analysis: Cover-up put SNP under a cloud - but tax blow had a silver lining
Opposition parties last night demanded the SNP repay the cost of the legal challenge out of their own party funds.
Scottish Labour leader Iain Gray said: "Alex Salmond should not only apologise to for misleading the Scottish public about his plans to hike up tax bills, but he should make sure the SNP pay back every penny of public money spent on this cynical cover-up campaign."
Emma Bo on, spokeswoman for the Taxpayers' Alliance, said: "It is unforgiveable that they should try to stop information from being made public which is in the public interest and use taxpayer funds to try to do so."
In his statement, Mr Swinney's insisted ministers remained of the view the memo was private, but that there was no point carrying on a legal case when the figures from it were in the public domain.
He said: "Ministers legitimately pursued this appeal against the Scottish Information Commissioner's decision, and continue to argue the case that ministers and civil servants need private space to encourage free and frank discussion on the development of policies. This issue was always about that principle - not the specifics of the policy."
Article Source KBG Test Blog (http://rc.kbg.me)
