Growth in the formation of Scotland's smallest enterprises has staged a recovery after two years of stagnation, according to the latest corporate statistics published by the Scottish Government.

The total number of private sector enterprises in Scotland was 279,495 at March 2007, a 5.3% increase on March 2006, with the smallest businesses (0-49 employees) accounting for almost the entire rise. More than 75% of the rise was due to the smallest firms - those unregistered for VAT or PAYE.

After rising steadily between 1999 and 2004 from 226,510 to 264,560, the smallest enterprises decreased by around 5000 in 2005 and increased only slightly in 2006 to 259,695. The latest figures show a jump to a record level of 273,740.

During the eight years, there has been a rise of 220 in the number of middle-sized companies, employing 50 to 249, though the latest figure of 3490 is still just below the 3500 reached in 2001.

Scotland's largest firms also peaked in 2001 at 2345, while the latest figure is just 10 better than the 2006 total of 2265.

Small enterprises also accounted for the 1.1% increase in employment, with medium and large firms seeing a very slight decrease in employment over the period (-0.2% and -0.4% respectively).

The Scottish Chambers of Commerce said the figures were "very encouraging", particularly in relation to small businesses and their contribution to growth and employment. "It bears out a lot of what we have been saying about the need for government to focus on smaller businesses and maintain that focus in their support," said spokesman Garry Clark.

He added that it was "too early to say" what impact the new administration would have, but the phasing in of rates reductions and the switch of the business gateway service to local authorities would be critical.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said its business survey had shown a "growing divide between the optimism of smaller and larger firms", which made yesterday's interest rate cut particularly welcome to SMEs.

The total number of enterprises in Scotland has increased by 20%, or 47,000, between 1999 and 2007. The number of small and medium enterprises (SMEs) was 277,230 at March 2007, a 5.3% increase over 12 months. SMEs accounted for 99% of enterprises and 53% of employment.

Registered enterprises with ultimate ownership outside Scotland accounted for 3% of businesses and 34% of employment. Within large firms (250-plus employees) they accounted for 81% of businesses and 61% of employment.