The council tax bands were set up 12 years ago

The party's intention to review the structure was disclosed by Jack McConnell at a public meeting in Edinburgh.

Scottish Labour will next week unveil a manifesto pledge to design a "fairer council tax banding system", the party leader said.

The Scottish National Party said it was time for Labour to stop "tinkering at the edges" and hold a full review of how local government is funded.

First-class idea

The present banding system, set in 1991, runs from Band A for properties worth up to �27,000 through to band H for houses worth more than �212,000.

At a public meeting in Edinburgh, a pensioner urged reform of a banding system in which someone living in a �400,000 home paid the same as someone in a house worth about half that.

Mr McConnell said this was "an absolutely first-class idea".

"The responsibility lies with the Scottish Parliament. It's something we have the power to do," Mr McConnell said.

"And when the Labour manifesto is published you will find a commitment to review council tax bands across Scotland."

It's time to stop tinkering at the edges and have a root and branch review of local government finance. Tricia Marwick SNP

He went on to tell the questioner: "They were set at a time when the housing market was very different. They need to be reviewed and need to be fairer across the board."

Nationalists accused Mr McConnell of making up policy on the hoof.

SNP local government spokeswoman Tricia Marwick said her party would hold a full review of all aspects of local government tax.

She said council tax had risen by 43% since Labour took power in 1997.

"It's time to stop tinkering at the edges and have a root and branch review of local government finance," Ms Marwick said.

"We need to look at roles, remits and methods of funding, including whether the council tax is right for Scotland's future."