The 260-bed hospital went into receivership last month, four months after opening, but the first sign that it was in trouble did not come until March this year, Mr Lang told the Commons Scottish Affairs select committee. Even then, he said, there were "mixed signals" . In spite of the failure to achieve targets that would have seen 6,600 patients through the hospital in a year, Mr Lang said "the banks who had invested all thought the project remained viable as late as October and November".
"The reason the receiver was called in was because one bank, Credit Lyonnais, pulled out, not because of the scheme but because of difficulties Credit Lyonnais was having nationally and internationally as a bank.
The Government's preferred solution was that a private buyer would be found and the project would realise its original objective of a hi-tech private hospital attracting patients from abroad.
Mr Lang stressed that the decision to go ahead with the scheme had not been his but those of officials and of the Scottish Industrial Development Advisory Board who recommended support for the scheme.
To date just 800 patients have been treated at the hospital. Labour and Tory MPs on the committee clashed over the cut-price and even free operations that the hospital has been providing to the NHS while in receivership. If a buyer cannot be found, it would cost at least £25m and possibly double that to convert it for NHS use, Mr Lang told MPs.
Geoffrey Scaife, chief executive of the NHS in Scotland, said the hospital was situated nine miles outside the centre of Glasgow in a "far from ideal" location with no provision for out-patients or an accident and emergency department.
The National Audit Office has confirmed that it is to look at the project and report to the Public Accounts Committee in January.Reuse content