Jack McConnell has warned of another round of upheaval in local taxation within five years if a local income tax is introduced, forecasting it would prove unpopular.

The Scottish Labour leader conceded the current council tax is controversial and unpopular and said he would like to find an alternative that is popular, stable and fairer, suggesting that could be partly based on income level. This is despite Labour attacking the SNP and LibDems for wanting to replace council tax with a local income tax, saying Scotland would become the highest taxed part of Britain.

"You should only replace the council tax if you have a sustainable system that raises the £2bn it raises now, on which there is some consensus," said Mr McConnell. "We're in danger of sleepwalking into changes in local government finance where the consequences are not being spelled out and it would be so controversial and disruptive that we'd have to change back again."

Speaking at a public event organised by The Herald, Mr McConnell challenged other parties over university funding.

There was also a warning yesterday from the principal of St Andrews University to the SNP, LibDems and Greens who want to abolish the graduate endowment, saying higher education needs more funding to compete rather than cutting off graduate contributions.

Elsewhere on the campaign trail, the SNP rolled out more business and celebrity endorsements, while Tory leader Annabel Goldie criticised the Labour and LibDem parties for their "incompetence" leading to the Union being under threat.

Prime Minister Tony Blair was in Eastwood and Kilmarnock, warning about tax rises resulting from SNP plans, while Alex Salmond squashed suggestions that some taxes could rise in an independent Scotland.