The bill that will abolish the Scottish Arts Council and merge it with Scottish Screen to form a new arts funding body for Scotland was introduced to parliament yesterday.

The Creative Scotland Bill will help "cultivate and support the best of Scottish arts and culture and will firmly place creativity at the heart of the nation's life", said Culture Minister Linda Fabiani.

It will abolish the Scottish Arts Council, which was established by Royal Charter, and Scottish Screen will be dissolved at the same time. The new body will be come into being next year.

Not only traditional arts and film will be within Creative Scotland's remit. Anne Bonnar - a leading arts consultant, who has been appointed as transition director to oversee the merger - has suggested the entire section of the economy called the creative industries will come under its scope.

Ms Fabiani said: "The establishment of Creative Scotland will cultivate and support the best of Scottish arts and culture and maximise the potential of Scotland's creative sector.

"The bill outlines that Creative Scotland and artists themselves will have the freedom and power to determine their own creative direction - a firm sign from this government that we will not interfere in artistic decisions."

Dr Richard Holloway, the chairman of the joint board of Scottish Arts Council and Scottish Screen said: "This is an exciting moment in the life of Scotland.

"The institutions and organisations responsible for furthering the creative life of Scotland have been under almost constant review for five years. Now we have a positive new direction to follow."

Chris Young, the producer of Seachd, The Inaccessible Pinnacle, a recent Gaelic film, said: "I am hugely enthusiastic about what Creative Scotland can do for film in Scotland and for Scottish films internationally.

"As a recipient of investment from Scottish Screen, both for Seachd and other projects in development, I recognise the importance of such support to the screen industry in Scotland and our wider culture. I hope that Creative Scotland will build on the good work by both Scottish Screen and the Scottish Arts Council."

Malcolm Chisholm, Labour's Shadow Culture Minister, said he welcomed the bill but added: "Labour will continue to scrutinise the bill to ensure that promoting participation and enhancing excellence are central to the legislation's aims.

"However, it is regrettable that on the same day the SNP launch the bill, that cuts to Scottish Ballet and Scottish Opera's budget are being imposed by the SNP/ LibDem administration at Edinburgh City Council."

Ted Brocklebank, Shadow Culture Minister for the Conservatives, said: "It is important that creativity is at the heart of the nation's life and we hope the new streamlined body will play a vital role in promoting the artistic excellence for which Scotland has long been renowned."