SCOTLAND'S first city of the millennium is to be Inverness, the capital of the Highlands.

It will be the first Scottish town to have city status conferred on it for more than 100 years, the last recipient being Dundee in 1889.

The town has triumphed in a fierce battle against Stirling, Ayr, and Paisley, all of which submitted strong applications for the desperately sought after elevation.

Supporters of the Inverness bid have consistently argued that city status will heighten the recognition of the town and attract more tourists to the Highlands.

The Queen will confer city status on Inverness, along with Wolverhampton and Brighton and Hove in England, to mark the millennium celebrations of her reign.

The official announcement is scheduled to be made in Inverness on Monday to co-incide with a statement from the home secretary in the House of Commons.

The vibrant, cosmopolitan town, which has evolved from an ancient fort to become the capital of the Highlands, is one of Europe's fastest growing with a population of 65,000.

As the regional centre for the Highlands, it is the administrative hub of an area the size of Belgium.

David Stewart, the Labour MP for Inverness East, Nairn and Lochaber, who has argued for city status for Inverness since he was a town councillor 10 years ago, was last night reluctant to comment until he had received official confirmation of the award on Monday.

But he was delighted at the possibility, saying: ''After a 10-year campaign I can hardly believe that we might have been successful. I know we're expecting to be told very soon. I will be absolutely delighted that all our hard work has paid off.''

Whitehall officials said Mr Stewart had masterminded a ''fearsome campaign'' in the face of strong opposition from other bidders.

Mr Stewart praised Inv-erness councillors, Highland council, the tourist and enterprise authorities, Lord Gray of Contin, Lord Lieutenant of Inverness-shire, and Cauldeen primary school, whose pupils produced a CD-rom extolling the virtues of Inverness, for rallying behind the campaign.

Earlier this year, Mr Stewart persuaded the late Donald Dewar, first minister, to give the Inverness project his public support, a difficult decision in the face of other competing bids from central Scotland.

Dr John Reid, the Scottish secretary, has backed the bid in Whitehall, where in conjunction with Buckingham Palace the final decision has been made.

The tourist industry believes it will help make the case for better air links with the south.

Fergus Ewing, the SNP MSP for Inverness East, Nairn and Lochaber, said last night: ''If the speculation comes to fruition it will certainly raise the profile of Inverness and boost confidence in the town.''

Inverness has been regularly recognised in the Tourism Town of the Year and Beautiful Scotland in Bloom awards.

The town was recently ranked fifth out of 189 British towns and cities by the Quality of Life Research Group at the University of Strathclyde.

The criteria included health care provision, levels of crime, cost of living, pollution, shopping facilities, education services, and job opportunities.