The Controller of Audit for Scotland, Robert Black, has been investigating the case of Nick Reiter who parted company with the island authority in January with a �75,000 pay-off.

Mr Reiter had been in his job for less than seven months when he was asked to go on extended leave.

He was later accused of misleading the council regarding his job as a former official at Westminister City Council during the time of the so-called "Homes for Votes" scandal.

Nick Reiter: Centre of controversy

Mr Reiter became head of Westminster's policy unit in May 1987, after working in the Department of the Environment.

The Tory council, fearing it might lose control to Labour, developed a policy of reducing the number of people legally eligible for accommodation in the borough so properties could be left vacant and available for sale.

According to the investigating auditor's subsequent inquiry, this conflicted with legal duties to the homeless and might constitute "gerrymandering".

The inquiry, however, recommended no disciplinary action should be taken against Mr Reiter, but in January councillors decided he should leave his job.

His departure created an outcry in Shetland, and The Accounts Commission for Scotland launched an investigation into the case after receiving a petition signed by hundreds of islanders.

BBC Scotland understands the Controller of Audit is likely to criticise procedures used by the island authority to deal with the matter.