A BATTLE over the future direction of Scottish Labour has intensified after Kezia Dugdale's mentor renewed his call for the party to back a federal UK and it emerged that one of her new MSPs had set up a campaign group to lobby for the move.

The Labour peer George Foulkes, who Ms Dugdale worked for as office manager and political advisor during his stint at Holyrood, said questions over Scotland's constitutional future were not going away and that his party should "take the lead" in proposing a solution following a new, UK-wide, constitutional convention.

However, others within Labour's ranks hit out at Alex Rowley, Ms Dugdale's deputy, who within days of a disastrous showing at last week's Holyrood election blamed a refusal to advocate home rule for the heavy defeat.

It follows Henry McLeish, the former Labour First Minister, entering the debate by calling for the party to devise a radical new plan for further devolution before proposing putting it to the Scottish people, possibly alongside the option of full independence, in a new referendum.

Lord Foulkes of Cumnock, who was Ms Dugdale's boss between 2007 and 2011, said: "The constitutional question will not go away. Labour should now take the lead in developing a stable coherent option to avoid a continued drift to separation.

"That option is not the status quo. It is a federal UK which recognises the differences of the nations and regions within it. Just as the Scottish Constitutional Commission gave us devolution, a modern style UK Constitutional Convention can devise the new federal structure for the UK. Since the Tory Government will not take the lead, Labour should take the lead, including all other parties and wider civic society."

It has also emerged that Daniel Johnson, who in one of the very few encouraging signs for Labour at last week's election took the Edinburgh Southern seat from the SNP and is widely tipped to become a key figure in Ms Dugdale's team, believes the party should back federalism.

Mr Johnson, who could not be reached for comment yesterday, said last year that his party needed to put forward a "strong, cohesive vision for all the nations" and set up a group calling itself 'The Labour Campaign for Federalism'.

READ MORE: Former Labour First Minister Henry McLeish calls for another referendum

The organisation, according to its website, believes that Labour must get on the 'front foot' and develop proposals for a federal UK, before campaigning to see the position adopted as official party policy.

However, one senior source claimed that a public debate over Labour's approach to the constitution was playing into the hands of the party's rivals, and was particularly critical of Mr Rowley's comments.

The deputy leader revealed that he had pushed for the party to fight to Holyrood election on a platform of home rule, but had found himself blocked by other senior figures in the party hierarchy.

The insider said: "The timing of Alex Rowley’s comments just does the SNP’s job for them. All it does is reinforce the SNP’s claim that we are wrong on the constitution."

It is not clear whether Ms Dugdale, who is widely expected to remain as leader, is open to a radical shift on the her constitutional stance, with her party not responding to requests for comment over her position.

On a humiliating night, Scottish Labour lost a third of its seats last week, falling behind the Tories and becoming the third party at Holyrood. Mr Rowley and others have said that a confused stance over the constitution was the main factor behind the decline, with a strategy of moving on from the referendum debate over independence falling flat.

READ MORE: Former Labour First Minister Henry McLeish calls for another referendum

Anas Sarwar, the former deputy leader and one of Ms Dugdale's newly-elected MSPs, admitted that Labour had tried to "move past the independence referendum" before voters were ready and that his party faced a "problem" in terms of the constitutional debate.

David Martin, the Scottish Labour MEP, has backed calls for an overhaul in Scottish Labour's position on the constitution. He said: "Labour, in the coming months, needs to sit down quietly and efficiently and work out what powers we need in Scotland to deliver economic growth and prosperity."