Oban is abuzz with talk of the Nationalist resurgence, but is it electioneering hype?

PARTY conferences have the unusual effect of making politicians popular in small towns. In Oban, as in Aviemore earlier this year, the activist class brings its chequebook and provides a boost to local firms. But the enthusiasm for Scottish Labour's annual conference is purely financial.

"I love taking their money," said one local publican, referring to politicians. "I feel like it's payback for the amount of cash they take from us."

Most folk in Oban, while happy to take the Labour shilling, were oblivious to the fact they were hosting one of the most concerted anti-Nationalist rallies Scotland has witnessed. Delegates may have differed on nuclear power and exchanged words on the role of the private sector in public services, but they were united when it came to baiting SNP leader Alex Salmond.

The unprecedented level of Nat-bashing reflected the SNP's resurgence. Several opinion polls have put the party either level with Labour or a very close second. This is contrast to the 2003 Holyrood election, where McConnell trounced John Swinney, and last year's general election result which saw the Nationalists slip to third behind the LibDems. A recent ICM poll even claimed majority support for independence.

A close election was clearly on the minds of Labour activists in Oban. Speakers, such as 2007 candidate David Whitton, lined up to attack the SNP's "long-distance leader", while health minister Andy Kerr described the Nationalists as the party of "half-truths, smears and lies". Even so, the party line was that the SNP could win next May.

"We are taking the polls seriously," said Labour MSP Bristow Muldoon. "People believe there is a distinct possibility the SNP can win next year. Our job is to make sure people do not sleepwalk towards independence."

Lord Foulkes, the party's campaign vice-chairman, concurred: "The Nationalist threat is real and never goes away. We have got to be vigilant."

But opinion is divided on why the SNP is close to Labour in the polls. One view, which was articulated by former party treasurer Bob Thomson, is that Scots are sick of Tony Blair and his policies. According to this logic, McConnell could be the first Labour victim of the Blair regime.

"People don't like the Iraq war, they don't like the privatisation of services and they don't like the things the government has been doing. That's why the SNP is doing well," Thomson said.

An alternative theory is that Labour's woes are caused by decisions taken in Edinburgh, not London. One MP said McConnell's recent "dithering" over his future, where he suggest he might not serve a full term if re-elected, was symptomatic of his "poor leadership".

Such an example is instructive. The Scottish Labour leader refused to commit himself to another four-year term when pressed last Sunday, only to incur the displeasure of colleagues who feared he was digging a hole for himself. McConnell then insisted he would at least a full term if re-elected (but only after begging a journalist to ask him the question) before hinting he might want eight more years.

This "farce", said the Labour MP, prevented the party from getting more coverage for its core messages of education and safeguarding the union. He believes the gaffe was "typical" of the way his Scottish colleagues have failed to generate any momentum over the past six months.

The scale of the SNP threat to Labour's hegemony has also reached Downing Street. Tony Blair last week wrote a newspaper column denouncing "separatism" and used his conference speech to lash at the Nationalists. The Chancellor, with his vast experience of Nat-bashing, has also used recent lectures to bait the SNP and promote his version of "Britishness".

In addition, the rise of the SNP is making waves across the Channel and the Atlantic. A recent article in Le Monde tracked the resurgence of the SNP, while an unsympathetic editorial in The Washington Post warned that independence was closer than ever. Lisa Vickers, the US consul in Scotland, also made a sceptical intervention to the debate recently.

But Labour's anxiety appears to be more stage-managed than real, a campaign tactic rather than a reflection of deep-seated fears. At last year's general election, Labour talked up the Tories only to knock them down again during the campaign. The strategy is "cynical but effective", according to one party insider.

"By warning that the SNP could win, we are framing the Holyrood election as a two-horse race between the Nationalists and Labour. And, as everyone knows, the SNP has never defeated Labour in an election," he said.

One Labour MSP who is well versed in the strategy said his party was talking up an enemy they believed was incapable of winning an election. Asked if Blair, Brown and McConnell really thought the Nationalists posed a grave threat to the union, he said: "They believe the SNP is in its strongest position for years" - before winking.

Institutional factors back up the theory of Labour's concern being more than a little hyped. Holyrood's electoral system, which contains an element of proportionality, is widely perceived to have an in-built bias against the SNP. Even if the Nationalists win the same number of votes as Labour, say various psephologists, McConnell's party will still win eight more seats than their rival.

Labour also stands to benefit from the unwillingness of Holyrood's mainstream parties to serve in a Nationalist administration. Although the Scottish Tories hinted they would be prepared to prop up a minority Labour Executive, the logic is that the Conservatives are eager to keep Alex Salmond out of Bute House.

The tense relationship between the SNP and LibDems also makes a coalition without Labour look unlikely. A LibDem minister told the Sunday Herald last week that a Nationalist promise to drop their referendum pledge was not enough to guarantee a coalition. Instead, he wanted Salmond to change his policy, a demand that is unlikely to be met.

But the party political point-scoring in Holyrood and Oban appears to have gone unnoticed by ordinary Scots. Outside the conference hall, taxi driver Ian Byrne was indifferent to the "war" being played out by the SNP and Labour. He said: "Apart from the smoking ban, the parliament hasn't done anything that has affected my life. It seems a bit remote, but then so is Westminster."

Jane Scott, a hotel worker in the town, was similarly unimpressed. "I don't know whether the SNP is ahead or not. It's difficult to believe what any of them say," she said, before admitting she did not know the identity of her local MSP.

The cynicism is, at times, easy to understand. YouGov last week issued two separate opinion polls for two clients on the same subject - but produced wildly different results. One of the polls, commissioned by the SNP, put the Nationalists in front. The second, courtesy of the anti-Nationalist Daily Telegraph, did not. As John Curtice, professor of politics at Strathclyde university, said: "It's all to do with how the questions are worded." Put another way, organisations are using polls to manipulate public opinion by asking biased questions.

First Minister's Question Time on Thursday was another low point in the parties' chase for votes, where McConnell's every attack on the SNP's Nicola Sturgeon was greeted by choreographed cheers and exaggerated clapping by his own colleagues. Luckily for Scottish politics, few people tuned in to watch the spectacle.

If anything, the week leading into Scottish Labour's last conference before the election is a foretaste of the next six months: dodgy polls, misleading tactics, negative campaigning and an electorate bewildered by an increasingly insular political process. Ian Byrne, who drove many of the MSPs to Corran Halls: "I can't imagine I'll see any of them again. It doesn't concern me greatly."