An estate agent in Scotland has been recorded admitting that the owner of the franchise he worked for had been engaged in "immoral" behaviour in connection with the purchase of repossessed homes, a newspaper has claimed.

The Sunday Mail had previously reported that John Kennedy, the owner of a Remax franchise in Edinburgh, had been buying properties that he had been instructed to sell after they had been repossessed by banks, contrary to the rules of some institutions.

John Shaw Stewart, an employee at the franchise, was recorded saying that the story "was a lot of nonsense", the paper claimed.

"John Kennedy has done nothing illegal. However, he might have done something immoral," Mr Stewart was quoted as saying.

HBOS has already ended its business relationship with the franchise, with a spokesperson telling the Sunday Mail that Mr Kennedy "broke our rules by purchasing some properties for himself".

Remax, a chain with offices across the UK and Europe, and the National Association of Estate Agents said they are looking into the claims.