James Shaw in Glasgow: PR would sweep away Labour's dominance of local authorities

The McIntosh Commission, which reported to First Minister Donald Dewar, has also recommended new ways of running councils and an inquiry into local government finance.

The findings of the commission, which was headed by Neil McIntosh, the former chief executive of Strathclyde Regional Council, came after 18 months of research.

Improving efficiency is key aim

As expected, the commission came out in favour of proportional representation for electing councillors but did not advocate a specific form of PR.

It says the new system should be in place for 2002, in time for the next council elections.

However, any move to PR could meet with strong opposition from within the Labour Party as it would almost certainly surrender its domination of Scottish local government if proportional voting was introduced.

The commission was not charged with looking at the way Scottish local government is financed, but still recommended an immediate inquiry.

It also said local authorities should be elected for four year terms and polling stations should be made more accessible with consideration given to electronic voting.

The report said any PR system should maintain the councillor-ward link and ensure fair provision for independents.

General competence

The commission also recommends the power of general competence for councils, meaning in certain cases they could take action in the community's interest without the permission of the courts.

The report calls for a covenant between the 32 councils and the Scottish Parliament, setting out their working relationship as well as a standing joint conference of MSPs and councillors and a formal working agreement between ministers and councils.

The commissioners also want all councils to carry out a review of their working practices, to completed by the end of the year 2000.

Community councils should be given a more influential role and ministers should consider introducing votes for 16-year-olds in electing the bodies.

And community councils should also be given more money and better facilities to take a prominent role in the Scottish democratic system.

Report calls for councils to review working practices

Other key recommendations include job descriptions for councillors and the consideration of executive or cabinet-style administrations.

There should be a pay and conditions package for all councillors and the abolition of the Special Responsibility Allowance for senior members - replaced with an independently assessed salary.

Only a limited number of councillors would qualify for the salary.

Council workers should be able to stand for election and only the most senior or those in politically sensitive posts would continue to be barred.

Parties should also review the use of the party whip in councils and any use of the whip should be declared for the public record.

The commission does not recommend directly elected provosts or council leaders but said they should be kept as other parts of the UK move towards directly elected mayors.

Mr McIntosh told journalists at a media conference that local government had had to go through "a very demanding time" in terms of reorganisation and financial stringency.

"New environment"

"We are trying to create a new environment which makes it possible for local government to operate, look to the future and regain the confidence of the people that elected it," he said.

The Scottish Administration will now consider the report's recommendations.

First Minister Donald Dewar said: "The report raises fundamental issues as local government is in a sense the foundation of our democracy.

"There is an agenda for change and I recognise that possibly electoral systems will be something that attracts a great deal of attention.