There should be a national holiday in mid-November to mark Britishness and community heroes, according to a think tank close to the Labour government.

But not in Scotland, the Scottish Executive responded yesterday.

It wants to push ahead with plans for a national holiday on St Andrew's Day, November 30, and suggested England could make more of St George's Day, April 23.

"There's a strong argument for making more of national days as a celebration, though it's obviously for the English to decide about St George's Day for themselves," said a source close to Alex Salmond, the First Minister.

The St Andrew's Day holiday was part of the executive's plans for its first 100 days in office, but it only amounted to an option on a half-day holiday for executive civil servants.

Next month, the executive intends to roll out plans for a full holiday for the Scottish patron saint's day, starting next year. This will be tied to a winter festival, running for nearly two months until Burns night, including Hogmanay events around the country and the Celtic Connections music festival in Glasgow.

But the Institute for Public Policy Research (IPPR) is to suggest, in a report called The Power of Belonging, to be published next month, that Prime Minister Gordon Brown should create an extra bank holiday to build British identity and be a "thank you" to community heroes.

It suggests the Monday after Remembrance Sunday, as that would build on an existing commemoration rather than creating something artificial, but conceding that it must not distract attention from remembrance events.

The idea is a "thank you" for local heroes, emphasising ordinary people who have made a significant contribution, and an "ask" for people to give back to their communities, while it would also emphasise diversity within Britain.

The report recommends the national celebrations should be co-ordinated by an independent committee including representatives of the voluntary sector, co-ordinated by a body such as the National Council of Voluntary Organisations. This idea is borrowed from the way volunteers are co-ordinated for Australia Day.

The IPPR report says that a quarter of Britons want to live in an area where "almost nobody is of a different race, colour or ethnic group from most people living in this country", but claimed it is a more tolerant nation than many others.

It says most people in the UK identify most strongly with their locality or town over regional, national or global identity - 56% of the population identify with locality first, compared with 25% that identify with the nation.

The Confederation of British Industry responded that the IPPR proposals could cost the economy up to £6bn for a day off work.

Neil Carberry, head of employment policy at the CBI, said: "The idea of celebrating national heroes is a positive one, but there is no reason this couldn't be done on an existing bank holiday.

"Statutory holiday entitlement is being increased from 20 to 28 days over the next two years, which will be a big improvement for many workers but comes at a substantial cost to firms. Offering staff an extra bank holiday would cost the economy up to £6bn on top."