Nicola Sturgeon has “utterly” refuted allegations that a decision to award a major ferries contract to an ally of the Scottish government was “jobs for the boys”.

The first minister told MSPs there was nothing improper about her government’s decision to give a £97m contract to build two ferries in 2015 to Jim McColl, a financier who had advised Scottish ministers on the economy and was a political ally of her predecessor, Alex Salmond.

That contract, which is under investigation by Holyrood’s public audit committee and Scotland’s auditor general, has since become a major scandal which has raised questions about the Scottish government’s economic competence and judgement.

The vessels are at least five years late and will cost at least £240m to complete, leaving Hebridean islanders experiencing repeated delays, cancellations and break-downs with their state-owned ferry services, run by CalMac. They are due to enter service next year.

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