BBC Scotland's Jenny Rollo looks at the background to the reforms.

BBC Scotland correspondent Mike Cassell: Vast tracks of Scottish land is now in the hands of foreign businessmen

Until Tuesday, Scotland was the only country in Europe with a totally free market in land ownership. This contrasts with Denmark, for example, where foreign nationals are not even allowed to own holiday homes - they must rent.

Pressure for reform of the flawed system has been building for some time. A number of cases have highlighted the problems of absentee landlords and the difficulties faced by communities attempting to buy the land on which they live.

Brian Beattie: "It would be wrong to classify all landowners as bad"

Spokesman for the Highlands and Islands Association, Brian Beattie, said: "We've had absentee landlords for generations. They are not present on the land and take very little interest in it.

"As a result the land has suffered and the people who live on it."

Land owned in number of acres

In one of the most celebrated cases, the community of Eigg raised £1.5m to buy their island from German artist Marlin Maruma in April 1997. Maruma had promised a £15m investment in the island when he bought it, but the money failed to materialise.

Previous owner Keith Schellenburg was also unpopular with the islanders, whom he described as "drunken, ungrateful, dangerous chancers". He once threatened to evict the entire island after his classic Rolls-Royce was destroyed in a fire.

A similarly unwelcome absentee landlord was Dr John Green, a pathologist form Sussex, who bought the island of Raasay in 1961. During the 10 years in which he owned the island he allowed it to fall into disrepair.

He also earned himself the nickname "Dr No" by blocking proposals to build a car ferry terminal.

The Land Reform Policy Group

Labour's response to the problem was to give a manifesto commitment to "initiate a study into the system of land ownership and management in Scotland which will look, for example, at measures to encourage crofting as well as options for removing the rights of feudal superiority".

Eigg islanders unveil a stone commemorating their purchase

The Land Reform Policy Group's remit is "to identify and assess proposals for land reform in rural Scotland taking account of their cost, legislative and administrative implications and their likely impact on the social and economic development of rural communities and on the natural heritage".

They published a consultative paper called "Identifying the problem" in February 1998.

A second paper entitled "Identifying the solutions" detailing the group's emerging conclusions was published in the late summer.

The groups consultations have finally borne fruit with Tuesday's announcement by Scottish Secretary Donald Dewar that the rights of communities who work and live on the land will be strengthened.