I think the Scottish party is one of the areas I would expect to have a majority of suppor

Mr Clarke

Mr Clarke said: "I'm still not happy with the whole idea of fiscal autonomy.

"I think that if you have different levels of tax north and south of the border, Scotland's taxation will inevitably be higher.

"In my opinion that would distort the UK economy, it would damage the competitiveness of Scottish business and make it less attractive to provide employment here.

"I have never been a great enthusiast of having two separate fiscal systems."

Mr Clarke's position contrasts with that of his rival who has not ruled out supporting fiscal autonomy for Scotland - something the Scottish National Party has been calling for.

Mr Clarke also launched an attack on Chancellor Gordon Brown.

Mr Duncan Smith has said he is the underdog

He said: "Mr Brown has done a certain amount of damage.

"I think we are seeing a rapid slowdown. The main problem now is how far is that slowdown going to go."

"I will obviously have a much clearer idea when I leave Edinburgh than when I arrived, but I have to say that I think the Scottish party is one of the areas I would expect to have a majority of support."

Of his visit to Scotland, during which he dined with 150 party members, Mr Clarke said: "I think my style of politics is nearer to the natural centre of gravity of Scottish politics, unlike my considerably more right wing rival who is slightly off the Richter scale in Scotland."

He pledged to regenerate the Conservatives after two disastrous Westminster elections.

The Tories, who failed to win any Scottish seats in 1997, won only one in this year's general election.

As many as 20,000 Scottish party members are eligible to take part in a postal ballot for the leadership election.

The result will be announced on 12 September.