ONE of Scotland's leading business organisations has called for Holyrood to be handed powers to improve the country's economic performance.

The Scottish Council For Development And Industry (SCDI) called on the Smith Commission, which is seeking to broker a deal on further devolution, to consider measures that would increase productivity and create more modern infrastructure.

Chief executive Ross Martin did not spell out specific responsibilities to be transferred to Holyrood but said Scotland must have "the right levers at its disposal to be a thriving economy for the long term".

He spoke out as Lord Smith of Kelvin prepared to stage the first cross-party talks aimed at agreeing a package of new powers for Holyrood.

His Commission, established by the main UK parties following the referendum, aims to reach a deal by the end of next month, paving the way for draft legislation in January.

Mr Martin said that while Scots voted to remain in the UK, "strengthening the powers of the Scottish Parliament was widely supported".

He added: "The Commission needs to look at the mechanisms that should be devolved to ensure the expressed view the Scottish Parliament should have increased responsibilities and account­ability is acted upon and that Scotland has the right levers at its disposal to be a thriving economy for the long term.

"As a country we need to address our productivity, infrastructure, innovation and internationalisation and I hope this process will see politicians on all sides look to the long term and the steps needed to address these areas for the benefit of future generations."

Studies published during the referendum campaign suggested private-sector productivity in Scotland lagged behind that of the UK as a whole.

In its independence blueprint, the Scottish Government set a target for increasing productivity.

The SCDI is among a number of bodies to engage with the Smith Commission. The independent economic development body will also host a meeting between business leaders and Lord Smith in Inverness next week. Nearly 6,000 members of the public have also submitted their views. Tomorrow representatives of the five Holyrood parties will meet in Edinburgh as part of the process.

In a personal submission yesterday, Lord Foulkes of Cumnock, the Labour peer and former Scotland Office minister, broke ranks with the main UK parties by arguing further devolution should end the Barnett formula.

In a vow days before the refer­endum the UK parties promised to retain the funding mechanism, which delivers higher than average public spending for Scotland. But Lord Foulkes said Holyrood should be granted as much tax-raising power as possible without damaging the UK, arguing: "This inevitably makes the Barnett formula redundant."

Yesterday, party negotiating teams restated their promises to work together. MP Gregg McClymont, one of Labour's representatives, said: "We will work constructively with all parties to ensure the maximum devolution is delivered to the Scottish Parliament while maintaining fair and equal representation of the people of Scotland within the UK."

An SNP spokesman said: "We are playing a full and constructive part in the process to deliver substantial new powers for the Scottish Parliament. Our key focus is on delivering 'powers for a purpose' - that means putting forward proposals that will deliver real change for the people of Scotland."