Annabel Goldie yesterday attacked the Scottish National Party as worse than Labour for its attachment to state control of public services.

The Scottish Tory leader did so in a Conservative conference speech in which she called for a review of Scottish local government, with elected provosts for those towns and cities where there is demand.

Meanwhile, the Scottish Tory fringe meeting in Blackpool heard criticism from activists that new party rules are forcing candidates on constituencies. Betty Waddell, a senior activist in Argyll and Bute, spoke out against the selection process which made Caroline Brodie - one of the leadership's approved list of candidates - one of only six Tories to be selected for Westminster seats so far, out of a Scottish total of 59.

With the party also having David Mundell as its interim chairman while having to fight to defend the marginal seat of Dumfriesshire, Clydesdale and Tweeddale, there is concern in English Tory circles that the Scottish party is far from ready if Gordon Brown calls a snap General Election.

Miss Goldie's main speech at Blackpool contrasted with moves to build alliances with the SNP on justice and housing policies, which she said has been "refreshing, stimulating and revitalising" for the party. But she argued the governing party opts too often for state solutions in public services.

"The SNP, just like Labour and the LibDems, is a party firmly wedded to the state - state intervention, state control and endless red tape," she said. "Arguably, the new minority government is worse. It is unremittingly hostile in its attitude to the private sector." She cited opposition to private prisons and profit-making in the health service.

She went on to argue there is a need for "real devolution, not more state control", including an end to "the steady but relentless erosion of local democracy in Scotland".

There is a need for "a fresh appraisal into the role of local government," said the Holyrood leader. "What is its purpose? Do we have the right balance between national, local and community responsibility?

"As we have seen in the council debacles in Edinburgh, there is a need for new civic leadership. That is why the Scottish Conservatives propose locally elected mayors where there is local demand in our major towns and cities".