The Department of Regional Development's (DRD) principal officer for ports and airports Keith Walsh, who is four levels beneath Regional Development Minister Conor Murphy in the department, sent the complaint to Cork businessman Ciaran O'Driscoll, who operates the subsidised Rathlin-Ballycastle route.

Yesterday an independent report cleared Mr Walsh of any wrongdoing but said that the incident had been an "error of judgment".

The DRD acknowledged its official had made a mistake but said that no disciplinary action would be taken because the incident did not represent a breach of the Data Protection Act.

But last night the Information Commissioner's Office, which enforces the Data Protection Act, confirmed that it had been contacted with a complaint and said it would study it to decide whether it was necessary to have a formal investigation into whether the law was broken.

The 107-page report's central conclusion is that the DRD was correct in awarding Mr O'Driscoll the £4 million contract and it rejects a series of allegations against the department's decisions and actions throughout the process.

But it also states that it is not clear whether a legal challenge by the losing tenderer to the DRD's decision would be successful.

As a result, it said that in future tendering processes a series of changes should be made to avoid the potential for costly court actions by losing bidders.

There was also a lack of documentation about key meetings, the report found.

It said: "While it is clear that mistakes were made... we have found no evidence... of DRD officials deliberately stage-managing the process to favour one bidder."

The report rejects allegations that the DRD wanted Mr O'Driscoll to win the contract and hence facilitated his bid.

The independent investigation also found that the rules set out for the tendering process were ambiguous which could have led to confusion about what was allowed.

A spokesman for Caledonian MacBrayne, the company which has operated the route for 12 years before losing out to Mr O'Driscoll in the tendering process, last night said it was studying the report.

And TUV MEP Jim Allister, who referred the whole issue to the Audit Office, said the report raised serious questions for DRD to answer.
"This internal report has to acknowledge 'basic errors' in relation to the procurement process and the administration of the tender exercise," he said.

"Concluding that such, nonetheless, did not 'affect the overall outcome of the competition' seems to me a giant leap of convenience for the department.

"The finding that key staff exercised 'poor judgment' is worrying in circumstances where public funds are being distributed through public contracts.

"I will be monitoring carefully how DRD implements the 12 recommendations in this report."

Members of the DRD's Stormont scrutiny committee have been briefed on the findings of the report.

Chairman and North Belfast Assemblyman Fred Cobain said he and his colleagues had concerns about the lack of transparency around the procurement process and how the mistakes that had been made created a perception of wrongdoing.

Both the DRD and Department of Finance and Personnel said they welcomed the report's findings.