ALEX Salmond is holding a "gun to the head" of local government in Scotland by refusing to give it more power unless there is a Yes vote in September's referendum, Lord Wallace, the Advocate General, has claimed.

The minister's remarks were made at the Convention of Scottish Local Authorities conference in St Andrews, which also heard from Nicola Sturgeon, who said: "I don't believe in independence just to transfer powers from Westminster to Holyrood; those powers should be transferred further down to local level."

But the Deputy First Minister was jeered when she suggested the SNP's council tax freeze had not removed power from local government, insisting councils still had a choice if they were willing to accept a cut in funding from Edinburgh.

Sarah Boyack, for Scottish Labour, who has been part of the commission finalising Labour's plans for more power-sharing, dropped a large hint that so-called city deals and further devolution to the Scottish islands would feature in Labour's offering when it is unveiled at the party's conference next week.

Saying how she could give her audience a sense of direction on Labour's proposals, she pointed to some "really exciting discussions" on city deals, looking at how local government could be empowered to build up a series of services. "It's not just about giving local government responsibility or power but also giving local government an income stream to go with them," explained the MSP.

Referring to the SNP Government's White Paper, which noted how independence would give Scotland the power to embed the role of local authorities in a written constitution, Lord Wallace stressed: "Of course, there is nothing to stop the Scottish Government doing this now. It is that gun-to-head negotiating tactic again; deliberately implying that only independence allows anything to happen."