She said that in recent times Scottish theatre at the Edinburgh International Festival had been poor.
Ms Lochhead particularly criticised recent work by the National Theatre of Scotland, especially the musical play Caledonia, from 2010, and 365, from 2008.
Speaking at the Edinburgh International Book Festival, Ms Lochhead, who is also a playwright, was asked what she thought of next year's festival, which director Sir Jonathan Mills says will not include productions about Scotland's independence referendum.
She said: "Am I supposed to be surprised? But I am not saying it is right that they are not mentioning this huge big issue for all Scottish people, whether it is 'Yes' or 'No'.
"The last thing that was Scottish that I saw there was Caledonia, probably the most rotten thing the National Theatre of Scotland did in their years, it was a disgrace.
"I am not saying they haven't done good work - I would think it was worth having a national theatre just purely to have Black Watch, which is one of the best things I have seen."
Ms Lochhead was taking part in a debate on 30 Years Of Scottish Culture with Catherine Lockerbie, the former director of the book festival. The writer was candid in her views about the National Theatre of Scotland's play from the 2008 festival, 365, written by David Harrower.
She added: "Caledonia was a bloody disgrace, it was crap, and so was 365 (also by National Theatre of Scotland), which was about the care of children in Scotland.
"It (the festival) just seems to be the kiss of death, when we get a chance, do we go all nervous, get on the international stage and do something rubbish?
"Not all of us, obviously there's been some good Scottish work."
Ms Lochhead, 65. read from her famous play Mary Queen Of Scots Got Her Head Chopped Off and told how she had lobbied the NTS for years to put on a performance of the play.
She said: "It was after a few years of my great friend David Greig (the playwright) trying to pursuade them to do Mary Queen Of Scots … I thought, 'Oh God, I didn't think once we had a National Theatre of Scotland it would be so hard to get it on'.
"But there you go: they did do it, in a terrible production that just toured the Highlands, a terrible wee thing. But Scottish Youth Theatre did it proud last week and the week before, and it lives to fight another day."
Mary Queen Of Scots ... was produced by the NTS in 2009 as a touring production, directed by Alison Peebles.
The National Theatre of Scotland said: "One of the many wonderful things about Scotland is that the arts and culture provoke such strong and diverse opinions.
"Our role is to present memorable theatre experiences to as wide an audience as possible and we welcome the healthy debate this responsibility brings with it."