EDINBURGH could be the first city in the UK to tax overnight visitors in plans announced by Nicola Sturgeon to allow authorities to raise their own revenue.

The First Minister told Holyrood on Tuesday the Scottish Government will announce a Bill to hand councils the power to introduce such a scheme which City of Edinburgh Council estimates could generate an additional £15 million of annual revenue for the city.

Speaking as she unveiled her Programme for Government, Ms Sturgeon said: “We will introduce a Local Visitor Levy Bill to give local authorities additional fiscal flexibility.

“This will help councils, if they so choose, to fund activities related to tourism and related infrastructure.”

The city has long campaigned on the issue and council leader Cammy Day said the news is welcome after “years of work”.

Mr Day said he will lobby the Scottish Government to ensure the additional revenue generated will be alongside the block grant, and not “instead of”.

A consultation held in 2018 saw 85 per cent of city residents who responded backing the scheme, including a large number of accommodation providers and businesses.

If successfully implemented, visitors to Edinburgh would be charged a small additional accommodation fee in order to fund infrastructure and services in the city.

The charge is common in other popular tourist destinations around the world, such as Barcelona.

Mr Day said Edinburgh is “very proud” to be one of the world’s most popular visitor destinations, but warned the success “comes at a cost”.

“We believe it’s right to ask visitors to make a small contribution to help us sustain and improve our tourism offer while managing its impact,” he added.

“We’ve been building the case for Edinburgh to become the first city in the UK to introduce such a levy, consistently and repeatedly making the case to Scottish ministers without success – until now.

“Ultimately the income this generates will help us continue to invest in and manage the success of tourism on our city, making sure we continue to offer one of the most enviable and enjoyable visitor experiences in the world – while bringing new and additional benefits to our residents who live and work here all year round.”