The next leader of the Scottish Labour Party ought to have "complete control" of the party, including Labour's MPs at Westminster - and set a timetable for the abolition of the council tax, according to Tom McCabe, the former Scottish Executive cabinet minister.

In an explosive intervention into Labour's Scottish leadership contest the former Finance Minister said it was essential for the Scottish leader to set a distinctive policy agenda which would mean accepting the case for abolishing the council tax, championed by the SNP.

By complaining that previous Scottish leaders had been hamstrung by Downing Street control, Mr McCabe immediately reopened a divide between Labour's politicians in Edinburgh and Westminster and opened debate on one of the biggest internal challenges facing the next leader: how to bring the party's elected members in both parliaments together into a fighting regiment instead of opposing factions.

Former Health Minister Andy Kerr, ex-Justice Minister Cathy Jamieson and finance spokesman Iain Gray are all vying for the Scottish leadership after Wendy Alexander's recent departure. The leader's job is routinely referred to as the top post in Scotland, but, in fact, the leader of the Scottish party is the UK leader, Gordon Brown.

MSPs supporting Mr Kerr insist that the new Holyrood leader should be in charge in Scotland, playing a bigger role than the Secretary of State for Scotland and the UK Labour leader.

Mr McCabe's comments, in an article for the Sunday Herald, threatened to trigger a civil war in the Scottish party with MPs insisting Scottish Labour has to remain part of the UK-wide party in order to take on the Nationalists. But in a pre-emptive attack Mr McCabe hit out at the "arrogance" of the party's Scottish MPs in failing to accept that last year's election victory by the SNP was "no fluke".

"Whoever takes over as leader of the Scottish Labour Party has to be in complete control of the organisation and policies that best suit Scottish circumstances," said Mr McCabe in his article. This has not been the case in the decade since devolution with some Scottish Labour MPs in Westminster favouring the "watered down" title because they never accepted the "consequences of devolution".

Mr McCabe added: "For too long, there have been Scottish Labour politicians at local government level and at Westminster who have been resentful, and even contemptuous, of the Scottish Parliament. That behaviour needs to stop now."

Mr McCabe warned the party could be pushed to the electoral fringes for a long time unless the situation changed and Labour councillors and MPs accepted that Holyrood was the party's main electoral battleground.

He recommended that Labour could also give itself a "massive boost" throughout the UK if it faced up to the "discredited nature" of the council tax and the new leader should consider a "timetable for abolition".

Mr McCabe also conceded that the SNP administration has delivered on enough of its manifesto commitments to give the impression among voters it is in "pursuit of change".

The admission delighted the Nationalists with Alex Neil hailing Mr McCabe as the first Labour politician to praise the SNP for doing a good job in government.

"Tom McCabe's cutting intervention will no doubt be causing some discomfort for Labour," said Mr Neil. "Despite failing to take action as Finance Minister his acceptance that council tax is unfair and agreement with the Scottish Government that it should be abolished will be an uncomfortable truth for all three Labour leadership contenders."

Labour should respond to the SNP, said Mr McCabe, with "a leader who is seen to be in charge, taking responsibility and being prepared to say and do what is best for Scots, no matter who it might upset".