Scotland on Sunday revealed last week that the company had turned down an offer of a further £14.5m from SE because it could not guarantee meeting stiff job targets. There had been hopes that IMI's project in Scotland, Stirling Medical, would create 500 jobs, but after three years it has just 50 staff on its books and has made 37 redundancies this year.

At a cost of £700,000 per job, sources have claimed the project has been an expensive gamble. The company is still months from bringing its product, a diagnostic kit for heart patients, to market.

Perry accepted the project had been a risk: "By its very nature it was always going to be at the margin. If it was not then the private sector would have assumed all the risk."

While refusing to discuss details of the negotiations, he said due diligence had been done: "Was it ambitious? Yes. Did it bear risk? Absolutely. Will it realise what we hoped? Probably not."

But he was convinced that the investment will bear fruit, adding: "We still expect to realise value, but not on the scale anticipated."

It emerged last week that IMI had contacted SE about transferring work from the US and Germany. But the company could not give guarantees on jobs and blamed US accountancy rules, tightened after the Enron scandal.

In a statement, it said: "A potential opportunity was identified to enhance our position as a centre of excellence within Scotland's R&D community by importing additional projects to Stirling from the IMI group.

"Scottish Enterprise was approached by our parent company IMI for financial support and responded positively. However, the conditions attached to the funding offered proved to be irreconcilable with accountancy laws in the United States and regrettably an agreement could not be achieved."

Last week, sources claimed pressure from shareholders was behind the company's inability to meet the job conditions. They demanded improved earnings following a string of acquisitions, while the shift of work from overseas would incur further costs.

But the company said the cost of moving additional work to Stirling was not a factor in failing to reach agreement with Scottish Enterprise.

"In the case of the American project it had already been publicly announced that the facility involved would close and the cost of moving the work had already been factored into IMI's overall business plan.

"The objective of bringing work from Germany was to accelerate that project and there would have been no redundancies at the German plant. So in either case the costs involved would not have been prohibitive."