Labour has been left in 'complete disarray' by the Budget, according to former Labour chancellor Alistair Darling.

The party was struggling because it did not have a "credible economic policy", he warned.

The Labour Big Beast, who led last year's 'No' to independence campaign, highlighted a party split in how to react to George Osborne's Budget.

While the shadow chancellor Chris Leslie appeared to suggest there was much he could agree with three of those vying to succeed Ed Miliband as Labour leader, Andy Burnham, Liz Kendall and Yvette Cooper, came out against the four year public sector pay freeze,

Mr Darling said: "The opposition is in complete disarray at the moment because we don't have a leader.

We are paying the price of not having a credible economic policy. We should have made a virtue of our legacy - the fact is the economy was growing in 2010.

If you don't have that credibility you are open to the charge you would only have borrowed more and taxed more.

Look at what George Osborne did yesterday - he's borrowing more, he's taxing more, and yet it is alright."

Meanwhile, Kezie Dugdale, the frontrunner for the Scottish Labour leadership has called on other parties to set out how they will use new powers at Holyrood to protect low earners from George Osborne's Budget.

The MSP accused the Chancellor of giving a boost to the rich while slapping down working families who need extra support, which included plans for a minimum wage increase but cuts to tax credits.

She reiterated her support for a 50p top rate of tax for the wealthy and said that if the SNP did not use the powers destined for Holyrood to adopt a new approach the party would lose their right to complain.

She said: "Labour will fight George Osborne's unfair policies, but we can do much more in Scotland than just oppose the Tories. Protest backed up by powers can protect Scotland from the Tories.

"The challenge now for all of us who oppose the Tory Budget is to say how we would use the major new powers coming to Scotland to do things differently. At a time of crisis for working families it isn't good enough to leave the power to do something different sitting on the shelf gathering dust.

"The original purpose of devolution was to forever protect Scotland from the worst of the Tories but keep the strengths that come from being part of something bigger. The major new powers coming to Scotland over tax and welfare give us an opportunity to make good on that founding principle."

Meanwhile, John Blackwood, chief executive of the Scottish Association of Landlords said the ending of tax deductions for buy-to-let mortgages was 'shocking' and could reduce the supply of affordable rented accommodation. He added: "This is a shocking decision by the chancellor of the exchequer which unfairly discriminates against landlords who provide valuable housing across Scotland."