It's claimed up to £10 million has been spent clearing and preparing a site in Greenock for a now scrapped women's only prison.
The Scottish Government has confirmed that the facility in Inverclyde will not go ahead as it does not fit with a vision of addressing female offending.
Plans were in place to replace Cornton Vale in Stirling by 2018.
Opposition parties have welcomed the u-turn but the Scottish Conservatives want ministers to come clean on exactly how much tax-payers money has been wasted.
Mid-Scotland and Fife MSP Murdo Fraser said:
"The Scottish Government have some serious questions to answer over the scrapping of the proposed women's prison in Greenock and taxpayers will rightfully want to know how much of their money has been wasted.
"The Scottish Government previously indicated that Cornton Vale was due to close in 2018 and Michael Matheson must now confirm whether this is still to happen. The people who work at Cornton Vale deserve some clarity over the future of their jobs.
"Last week when I asked the First Minister about the Greenock project I was rebuked. Announcements like this must be made in parliament under the full scrutiny of elected officials otherwise the SNP stand accused of trying to brush this latest U-turn under the carpet."
New Justice Secretary Michael Matheson has been scrutinising proposals for a purpose-built facility at Inverclyde.
During a visit to the '218 centre' in Glasgow today, he stated that the current plans do not fit with his vision of how to address female offending and that Scotland needs to take a more radical and ambitious approach.
The Scottish Government and Scottish Prison Service say they'll now undertake a period of extensive engagement with key partners with a view to investing in smaller regional and community-based custodial facilities across the country.
Mr Matheson has said the revised proposals must include options for smaller regional facilities for female offenders across Scotland and must be more in line with the recommendations of an expert group headed by Dame Elish Angiolini QC. The proposals will also consider whether there is scope for a smaller facility within the prison estate for the low number of serious female offenders who pose a risk to the community and are given long-term prison sentences.
Mr Matheson said:
"Since taking up post as Justice Secretary, I have been looking closely at proposals for a new prison for female offenders at Inverclyde. I've also listened carefully to the views expressed by a number of key interest groups.
"I've decided that the current plans for a prison for women in Inverclyde should not go ahead. It does not fit with my vision of how a modern and progressive country should be addressing female offending. We need to be bolder and take a more radical and ambitious approach in Scotland.
"When it comes to the justice system, we must be smarter with the choices we make and be more sophisticated in the way in which we deal with female offenders.
"As part of an expert group tasked with examining Scotland's approach to addressing this issue, Dame Elish Angiolini QC made a number of important recommendations, recognising that female offenders have very different needs to their male counterparts and require very specific support.
"We know that women offenders are far less likely to be a danger to the public compared with men. We also know that the families and children of female offenders are more likely to go off the rails and offend themselves if mothers are jailed miles away from home. This turns into a vicious circle, affecting future generations, and is doing nothing to address reoffending.
"I believe we should be investing in smaller regional and community-based custodial facilities across the country, rather than a large new prison for women. This approach would be more closely aligned with the vision set out by Dame Elish. It also demonstrates the Scottish Government’s commitment to tackling inequalities.
"We need to ensure that links to the family and community can be maintained, whilst targeted work is undertaken to address the specific issue which is fuelling the crime such as alcohol, drugs or mental health issues.
"The 218 centre in Glasgow which I visited today provides exactly the type of sophisticated approach that I would like to see as part of our plans for the way in which we look after women in custody.
"I share the vision of Dame Elish that we need to transform services for women so that we can help them break the cycle of reoffending and they can start making a positive contribution to society.
"Whilst it is for the Courts to decide who receives a custodial sentence, I believe that too many low level female offenders are sent to prison. I want to take a new approach in dealing with these types of offenders and provide them with the best possible support to help turn their lives around."