An oil company is suing the Scottish Government over claims its property is being contaminated by “hazardous chemicals” released from land used for the M74 extension.

Esso Petroleum wants Scottish ministers to take action to prevent further escapes and is seeking damages for the cost of monitoring its land and loss of value.

The firm claims it will cost £1.6m to clean the West Street site in Glasgow.

Ministers sought to have the action dismissed but a judge at the Court of Session said it could proceed.

Esso owns a site on West Street in Glasgow, south of the River Clyde, where a filling station was in operation until about 2013.

In 2004, the Scottish Government acquired adjacent land from chemical firm Brenntag Inorganic Chemicals Limited to help complete the M74 link.

Joint venture Interlink M74 JV carried out the construction of the project to deliver the five-mile stretch of motorway.

Esso claims that as a result of those operations, hazardous chemicals present on the M74 land were released and continue to be released into the groundwater system, and that contamination of the site has occurred and continues to occur.

The firm added that the value of the site had fallen by £350,000 because of contamination and that it has required and will continue to require to carry out site investigations and monitoring of the contamination at a total estimated cost of £445,000. It claimed that if ministers failed to carry out removal and remedial measures it would have to do so at a cost of £1.6m.

Ministers claimed that Esso had not made relevant pleadings of fault on its part and that the government had engaged competent independent contractors to carry out the M74 completion works.

However, the judge held the claim should proceed to inquiry as the action was not bound to fail.

Delivering his opinion, judge Lord Doherty said: “I do not think it can properly be concluded, without proof, that the operations must necessarily fall outwith the ‘inherently hazardous’ category.”

He added: “Similarly, it cannot be concluded on the pleadings that the first pursuer’s claim falls to be characterised as being a claim for pure economic loss. Even if I had been of the view that the first pursuer’s averments were insufficient to allow proof on that issue… I would have held that I am unable to affirm at this stage, and without careful examination of all the authorities on pure economic loss, that the first pursuer’s claim here is necessarily too remote.”