11 October 2010 Last updated at 10:12

Scots budget 'to push tax powers'

A budget to be published by the Scottish finance secretary next month will include an "alternative scenario for economic growth".

John Swinney is expected to argue there could be a thriving economy if full tax powers were transferred to Scotland.

Ministers will claim the projections are based on work by economists.

The document will also spell out where spending cuts will fall in Scotland in the light of the UK chancellor's plans, which are to be announced next week.

A BBC Scotland news special examining the cuts to council budgets

• What's your council saying about cuts?

BBC Scotland's political editor Brian Taylor said Mr Swinney would base his budget on the assumption that £600m would be cut from day to day spending - and a further £600m from capital investment.

"That capital cut is potentially the most worrying as it's a much higher percentage than for revenue - and, ministers believe, will damage the broad economy," he said.

He added that the alternative scenario, arguing that Scotland's economy could revive with full control of tax and spending, would be condemned as "fantasy government" by political rivals.