Mr Stephen made no financial gain from the error

The Scottish Lib Dem leader claimed an allowance for his second home in Edinburgh, on which he had a joint mortgage in place.

The Scottish Parliamentary Body (SPCB) said the rules were clear that MSPs were only entitled to reimbursement of mortgages in their own name after 2001.

However, it accepted that he had made no financial gain.

The SPCB noted that the amount of his claim was exactly the same whether the mortgage arrangement was in his name only or joint names.

I very much regret this error Nicol Stephen

Therefore, there was no additional cost to the public purse.

The SPCB accepted that the claim had been made in error and was satisfied that Mr Stephen had not made an improper use of allowances.

Under the rules, MSPs who represent a constituency that is outwith commuting distance of the parliament are entitled to the allowance.

As MSP for Aberdeen South, Mr Stephen is entitled to claim for the interest on a mortgage for a second home in the capital.

However, members are only allowed to claim if their name is the only one on the mortgage.

This breach serves as a reminder to all members to ensure they are alert to every detail of the allowance scheme SPCB

Mr Stephen has been claiming �9,000 a year allowances on a �190,000 home he bought with his wife in February 2002.

He said he "fully acknowledged" there has been a breach of guidance.

"I very much regret this error," he said.

"I sincerely believed the arrangements I had put in place were acceptable.

"Neither I nor my wife have benefited in any way and there has been no additional cost to the parliament as a result."

'Acted promptly'

He said he had "acted promptly" to resolve these issues with the parliament.

"As indicated in my letter to the parliament's chief executive, I have already taken steps to transfer the property and the mortgage into my sole name," he said.

A parliament spokesman said: "The SPCB concluded that this breach served as a reminder to all members to ensure they are alert to every detail of the allowance scheme and the handbook issued to them as guidance."

Earlier this month, Presiding Officer George Reid said the scheme would be reviewed.

'Final nail'

It has been the subject of persistent criticism in recent years by Solidarity MSP Tommy Sheridan.

He said: "This is yet another example of MSPs bending the rules to suit themselves and getting away with it.

"If Nicol Stephen had been a social security claimant wrongly getting benefit he would be in court or jail by now, but the parliament is lightly rapping his knuckles.