Committee MSPs delivered a "comprehensive rejection" of the bill

MSP Tommy Sheridan wanted to see people who earn �30,000 a year paying 15% tax and those on �90,000 paying 20%, above their normal income tax.

He said people on an income of less than �10,000 would not pay.

Holyrood's local government committee said the tax would be unfair to people on modest incomes but the SSP said Scotland's poor had been let down.

The committee's report said 400,000 poorer people were already exempt from council tax and a nationally set service charge would undermine local decision making.

It also said the tax would be difficult to collect.

The politicians have decided to stick by the wealthy and well-off minority and defend the council tax rather than stick up for the pensioners and ordinary workers Tommy Sheridan SSP MSP

Committee convener, Labour MSP Bristow Muldoon, described the dismissal of the proposal as the "most comprehensive rejection of any bill that's been brought before the Scottish Parliament since it was introduced in 1999".

He told BBC Radio Scotland that while one of the aims of the bill was to alleviate poverty, many poor people in Scotland would not benefit.

He said: "The bill, in the view of the committee, would damage the Scottish economy, both as a result of fiscal flight and loss of income and also the bill would undermine local democracy in Scotland by reducing the powers of local government.

"But finally, the bill also proposes to write off hundreds of millions of pounds of outstanding debt owed to local government in Scotland and we again felt that was wrong."

Reconsider funding

Mr Sheridan said: "Bristow is just talking nonsense. The fact is that we have 83% of Scottish households who have an income of less than �40,000 a year.

"Every single one of those households would benefit in relation to the scrapping of the unfair council tax.

"The problem we have in relation to the committee is the politicians have decided to stick by the wealthy and well-off minority and defend the council tax rather than stick up for the pensioners and ordinary workers."

Earlier this month, MSPs rejected a call for ministers to reconsider their funding to local councils and to replace the council tax with an income-based alternative.

The current system is being reviewed. However, no change is expected until after the next Scottish Parliament elections in 2007.