This government appears ever-complacent about the economy and has adopted a policy of burying its head in the sand

Kenny MacAskill

However, opposition parties have attacked the government over its handling of the economy.

The ILO figures include people who are out of work but not necessarily claiming unemployment benefit.

The 27,000 increase, to a total of 170,000, represents more than half the rise experienced across the whole of the UK.

Mrs Liddell said that ILO figures "should be seen in the context that employment has increased by 7,000 over the year".

She also insisted that there were 98,000 more Scots in work now than there were in 1997.

Helen Liddell: "Strong fundamentals"

She blamed the increase on earlier job losses in tourism and electronics, which she said were now coming through into the figures.

Highlighting the problems experienced across the world by the computer and high-tech sector, she said: "No economy can be immune from international upheaval."

However, Scottish National Party enterprise spokesman Kenny MacAskill described the ILO increase as "staggering".

"Compared to the 12 other nations and regions of the UK, Scotland has the second worst ILO unemployment rate," he said.

"This only confirms - if it needed to be confirmed - that Scotland is in the grip of a recession.

Economic policies

"This government appears, however, ever-complacent about the economy and has adopted a policy of burying its head in the sand and refusing to even acknowledge that there is a problem.

"Once again the economy in Scotland suffers as the government appears more concerned with economic policies that are right for the south east of England rather than policies that are right for Scotland."

The figures released on Wednesday do not take the economic impact of the 11 September terrorist attacks on America into account.

With more companies cutting back on staff following the atrocities, BBC Scotland business correspondent Hayley Millar said it looked like the current trend could continue.

The Scottish business community needs action, not words, if it is to cope successfully with the downturn which was already evident before the World Trade Center atrocity

David McLetchie

"We need to look further back for a cause, and I think we can put it down to the downturn in the electronics sector," she said.

"There has been a worldwide slump in electronics all of this year and that's a very important sector for Scotland.

"In the past it has buoyed up manufacturing figures here and disguised the real picture."

Mrs Liddell said that any rise in unemployment figures was a disappointment.

But she stressed: "For reasons we all understand, this is a difficult time for the Scottish economy. Yet the fundamentals remain strong.

"The claimant count rate remains at 4.1%, the lowest rate for a quarter of a century."

Economy 'unsafe'

And she added: "It would be naive to think that the Scottish economy can remain immune to global economic developments. The events of 11th September have added to the uncertainty."

However, Scottish Tory leader David McLetchie said the statistics were another sign that Scotland's economy was "unsafe in Labour hands".

"The government must act now to remove many of the burdens it has imposed which are moving Scotland from Tory boom to Labour bust," he said.

"The Scottish business community needs action, not words, if it is to cope successfully with the downturn which was already evident before the World Trade Center atrocity."