Edinburgh wants to install a 'transient visitor tax', or hotel bed charge, as early as April next year.

As part of the forthcoming £1.5bn City Deal which Edinburgh City Council is likely to sign with the UK Government in March, the council is lobbying to be given power to install the charge to raise millions of pounds a year for culture spending in the capital.

Andrew Burns, leader of the city council, yesterday said he is optimistic the City Deal - which also includes Fife, West Lothian East Lothian, Midlothian and Scottish Borders councils - could be ratified both by the council and Governments in March and include the new taxation power.

Read more: Edinburgh could become first Scottish city to introduce tourist tax

This week the former SNP minister, Kenny MacAskill, said the "time has come" to introduce a nightly tourist levy, an idea also backed by Labour.

The term "transient visitor levy", or TVL, is being used as the name for the charge in Edinburgh, a duty which could be added to restaurant as well as hotel bills.

The money raised annually would be specifically ring-fenced for cultural spending, Mr Burns said.

A charge of £1 or £2 per hotel room per night could raise £10m for the city, previous estimates have said.

Aberdeen City Council is also in favour of installing a charge, while Glasgow has investigated it as a local taxation option.

However, the Scottish Government has not supported the idea thus far and could block any new tax raising power in the City Deal.

Fergus Linehan, director of the Edinburgh International Festival, has backed the concept, as has John Donnelly, chief executive of Marketing Edinburgh and Councillor Richard Lewis, culture convenor.

Read more: Edinburgh could become first Scottish city to introduce tourist tax

A new document on the City Deal notes: "The City Region Deal creative/cultural proposition [includes] enhanced investment in destination marketing, festivals and cultural infrastructure, potentially through a Transient Visitor Levy or a suitable alternative fiscal mechanism."

Cities across the world use a nightly hotel bed tax, including Berlin, Barcelona, Paris, Rome, Bruges and Dubai.

Bath, in Somerset in England, is considering the idea of a transient visitor levy, which would make it the first city in the UK.

Mr Burns said: "I am very strongly in favour of it.

"I don't think it would put people off coming here, personally.

"In the current climate it would alleviate huge pressure on us - our festivals and events go from strength to strength, but... we cannot rest on our laurels, we are being chased by loads of other big cities that have significant events and Edinburgh cannot just assume it will have the pre-eminent position it's got at the moment, and that requires money.

"A modest levy, or transient visitor levy, would provide several millions of pounds every single year that would be re-invested back into the cultural offering."

Read more: Edinburgh could become first Scottish city to introduce tourist tax

The new power would need to be approved in Parliament but Mr Burns said it could be installed as early as April 2018.

He added: "In this chamber, there is all party support for the idea.

"The reluctance to date has been at Government, not just the SNP but the previous Labour/Liberal Democrat government.

"But I think the reluctance has always been about 'well if Edinburgh goes first, if Glasgow goes first, it will have a negative impact on that specific city' but I think there might be given powers to have it in Edinburgh."

A Scottish Government spokesman said: "The Scottish Government has no plans to implement any new taxes on the tourism sector."

Last year Mr Linehan said that a TVL or similar would create a "virtuous circle" and said "if tourism increases, the tax increases so it can be re-invested - I think there is something very positive in that."

The Fringe Society said: "We would be keen, as we are sure many people would be, to see a proposal for a tourism tax with details such as where it would be levied and how the money would be distributed, before putting out backing to such a proposal."