Tommy Sheridan said the SSP should focus on the list votes

The SSP national executive had said candidates should only fight for constituency seats if local circumstances were favourable.

But party members backed an alternative plan to target some key constituencies.

The decision came at the party's annual conference in Dundee, where leader Colin Fox delivered an upbeat message.

Glasgow MSP Tommy Sheridan had said the party would do better by concentrating on gaining second votes.

The SSP had candidates in nearly every constituency in 2003, where more than half of MSPs are elected via the first-past-the-post system. However, it did not win any seats.

Many are the voices who suggest the SSP are finished, but they fail to understand the SSP has a hugely important role to play in Scottish politics Colin Fox SSP leader

The party's six MSPs were elected through the regional list system, with two in Glasgow and one each in the West of Scotland, Central Scotland, South of Scotland and in the Lothians

Leading party figures advised that they should now contest constituencies in "exceptional circumstances" and focus on the regional 'top-up' list where 56 of the 129 MSPs are elected via the additional member system.

Mr Sheridan said: "I think we have to maximise the potential of the voting system. That means we go for the second vote only so that we actually get that preference from the elector.

"When we went for the first vote and second, some people would give us their first vote and give their second to someone else. Really it's the second vote that matters to the SSP."

But local delegate Sinead Daly questioned the evidence that the SSP would boost its number of list votes by not standing for first-past-the-post seats.

"Major retreat"

She said: "Moving from standing in every seat in Scotland to standing in none is far too much of a retreat.

"I don't actually think we should stand in every seat but where we've a branch, the money and the willingness to stand in first-past-the-post seats then I think we should."

Kevin McVey, from Lanarkshire, said list candidates with no constituency base would struggle to attract the attention of local media.

Speaking earlier at the Caird Hall, Mr Fox praised the party's record on issues including asylum, public housing stock transfer, hospital closures and so-called CIA rendition flights.

Mr Fox, who was elected to replace Mr Sheridan at last year's conference, also acknowledged difficulties since the previous leader's abrupt resignation in November 2004.

Colin Fox said the socialist star continued to shine

Among these was the suspension of four SSP MSPs - and subsequent loss of �30,000 wages - for their Holyrood protest over the right to demonstrate at the Gleneagles G8 summit.

However, Mr Fox told delegates: "Many are the voices who suggest the SSP are finished, but they fail to understand the SSP has a hugely important role to play in Scottish politics."

He reiterated demands for the immediate withdrawal of US and UK troops from Iraq and attacked Labour's stance on nuclear weapons and new nuclear power stations.

The SSP leader also launched a campaign for "people not profit", pledging to put the interests of workers ahead of corporations by defending pension rights and public services.

Delegates were told: "The need for socialism and for the SSP is greater than ever."

Mr Fox said the party had enjoyed success in recruiting 150 new members since October - among them former Dundee Labour MP and MSP John McAllion.