The Liberal Democrats yesterday promised a major onslaught on red tape, but opponents were quick to ask why party leader Nicol Stephen had not done this already as Deputy First Minister in charge of the enterprise portfolio.

Mr Stephen said that if he won power after May he would move towards a system where regulation was linked to risk.

He said the Scottish Environment Protection Agency (Sepa) could be used as a trailblazer for this approach.

Mr Stephen also said that in office the LibDems would set up an industry-led body to advise on cutting regulation, reduce the burden of inspection for companies that meet high standards, and bring in more joint inspections to cut repetitive procedures for companies.

He told a business breakfast in Edinburgh: "I want to see Scottish business thrive and I believe that can only happen by reducing the burdens on them.

"One of the most significant problems for business is red tape and regulation. This is a big challenge but it's one I'm determined to meet head on."

Jim Mather, the SNP's shadow enterprise spokesman, said: "As Enterprise Minister, Nicol Stephen himself has presided over the increase in red tape that has held businesses in Scotland back."

For Labour, the party's candidate in Strathkelvin and Bearsden, David Whitton said: "Labour's package will reduce the burden on Scottish households, businesses, the voluntary sector and government."

Murdo Fraser, Scottish Conservative deputy leader and enterprise spokesman, said: "Today we've seen hypocrisy taken to new heights by the LibDems. They try, and fail, to make everyone forget that they've been in government for eight years."