HOLYROOD'S political leaders have been urged not to waste the latest opportunity to reform local taxation despite opposition from the better off who would be forced to pay substantially more under a fairer system.

The Commission on Local Tax Reform, which issued its report yesterday, said that the current council tax "must end" and that a more progressive model should replace it.

While the cross-party group, which was boycotted by the Tories, did not make a specific recommendation for a replacement system, it said it favoured a hybrid model with income potentially being drawn from a reformed property tax as well as levies on income and land.

However, proposed changes would be likely to encounter strong opposition from the losers of any reform, with those in higher value homes likely to see bills increase substantially.

Work carried out by the commission found that under a 'proportionate' property tax system, those in the most expensive homes would pay 15 times more than those in the cheapest, who would see their bills halve. Under the current council tax, those in highest value homes pay only three times more than those in the lowest.

The commission also found that had a local income tax been introduced to replace council tax, which currently raises £2 billion, a rise of more than 4p in the pound would have been needed to plug a gap in budgets in 2013-14.

While generally supportive of local government's tax base being expanded to include income if possible, it was warned that the move would present "substantial administrative challenges" while also increasing the risk of tax avoidance.

A tax which would see levies based on the value of land rather than what is built on it was found to be "promising" but more work was needed to "translate the economic theory" into terms the public would understand.

The publication, intended to inform manifestos ahead of next May's election, represents the third attempt since devolution to reform local taxation. A 2006 report, which found tax should be based on an annual charge of around one per cent of a home's value, was dismissed by then-First Minister Jack McConnell before it was published while the SNP, having been elected in 2007 on a promise of introducing a local income tax, shelved its plans two years later.

Professor Kenneth Gibb, a housing expert based at the University of Glasgow who gave evidence to the commission, said: "The Burt Report never got out of the starting blocks. This has more chance as it has cross-party buy in, and recognition that the council tax can't go on as it is. I don't think the status quo is an option.

"But there's no guarantee of success. In some respects the work begins now. The parties have some degree of obligation given that they have given their support to what this commission has done. It's always a concern that they'll come up with a fig leaf, but I think there's an acknowledgement the council tax will get more and more difficult as the years go on. If we just tinker with the system, we'll be back here in the same situation in a few years' time."

One source close to the talks said they believed the SNP was determined to finally reform local taxation but was "terrified" of going in to next May's elections as the only major party promising a radical overhaul that would prove unpopular with a substantial section of more prosperous voters.

It is understood the recommendations became stronger as talks went on, raising hopes that politicians would follow through on the findings of the report in manifestos. However, the source warned that prospects of a far-reaching solution "remain fragile", with parties liable to change positions as an election approaches in favour of populist policies.

Marco Biagi, the SNP local government minister who co-chaired the commission, issued a plea to rival parties as he sought to maintain a consensus.

He said: "We have to construct from the options available something that meets those key criteria - that local tax should be more progressive, broader and more empowering to local government. We'll bring forward detailed proposals on that in the new year and we would strongly urge all the other political parties to do likewise. No-one has any excuse for not bringing forward real proposals that will allow people to see how any system would operate."

However, the report drew a lukewarm response from the Liberal Democrats, who described it as a "missed opportunity". Jackie Baillie, Labour's public services spokeswoman, refused to make any commitments saying: "The challenge for all political parties now is to consider these options and come forward with their solution to put to the electorate next year."