Fiona Hyslop’s decision to hand over public money to T in the Park organisers is to be investigated by Audit Scotland.
The Linlithgow MSP handed over £150,000 to DF Concerts, despite the company posting a £6.5 million profit.
The public spending watchdog announced the probe, after demands from opposition MSPs for full disclosure.
A former SNP advisor, Jennifer Dempsie, who worked for the festival organisers at the time, set up a series of ministerial meetings for the company, sparking claims of “cronyism.”
Culture Secretary MsHyslop suggested she was told the event could be scaled back or relocated to England unless it was given financial aid but Geoff Ellis, T in the Park boss, denies this was the case.
The Scottish Government has been under increasing pressure to reveal what the money was spent on, as state aid funding rules mean it could not be used for infrastructure at the new site.
A spokeswoman for Audit Scotland said: “Our work helps ensure the public can have trust and confidence about how public money is used.
“Given the public interest and correspondence we’ve received, we’ve decided to review the funding provided to T in the Park as part of the audit of the Scottish Government’s consolidated accounts.
“We will look at the relevant governance arrangements and how grant funding was applied in this case. The outcome of our audit work will determine when we report our findings.”
A spokesman for the Government said Ms Hyslop had already given “very extensive” evidence to the education and culture committee and had set out the business case and reasons behind her decision.
He said: “The Scottish Government has published 600 pages of information relating to this issue under the Freedom of Information Act. We will of course be happy to help Audit Scotland in its work.”