The scandal surrounding former SNP chief executive Peter Murrell is ‘embarrassing internationally’, a former First Minister has said.

Lord Jack McConnell – who served in the top job between 2001 and 2007 – told a conference in Edinburgh the situation has damaged trust in politics as he again pushed for a joint inquiry by committees at both Holyrood and Westminster.

Murrell – the estranged husband of former First Minister Nicola Sturgeon – pled guilty last week to embezzling more than £400,000 from the party, spending it on scores of personal items during his time as chief executive.

While Lord McConnell said he ‘understands’ the stance of First Minister John Swinney – who has steadfastly rejected calls for a parliamentary inquiry into the scandal – he urged him to ‘set that aside’.

‘This is not just hilarious tittle-tattle here in Scotland,’ he said.

‘This is embarrassing internationally for us now and we need to take it seriously, even if it seems in some aspects – although obviously not in the criminal prosecution, which is very serious – a good source for the comedians.

‘That’s not the point, I think the point here is the reputation of Scotland globally and I would welcome a bit of a rethink at the top and a willingness to be open with some kind of public inquiry.’

Lord McConnell stressed he was not calling for a full, judge-led inquiry, which ‘everyone despairs at these days’, but a ‘fast, parliamentary inquiry that calls witnesses and deals with this within the year’.

The situation requires a ‘response from politicians’, Lord McConnell said. ‘I think there’s a genuine issue across all of politics in the UK, in fact, in almost all the developed democracies of the world,’ he said at the Scotland 2050 conference in Edinburgh.

‘I travel a lot and I see it everywhere – and that is a mistrust that is based on the idea that there is one rule for them and one rule for us.

‘It’s felt deeply by the population almost everywhere. I think the past week in Scotland demands a response from politicians.’

He added: ‘I would prefer if it was not a straightforward party-political or partisan approach and that’s why I’ve suggested that I think both parliaments – rather than holding separate inquiries or no inquiries, rather than holding inquiries that would be accused by one side or the other as being either a cover-up or a hatchet-job – should knock their heads together and for the first time since devolution hold a joint parliamentary inquiry.’

The inquiry should look at the funding of political parties, as well as governance.

While Lord McConnell warned against ‘the state interfering in political freedoms’, he added ‘parliamentarians have got a duty to try and ensure that politics and the reputation of politics and government is better’.