A former senior official has been advising the SNP

In private advice to the SNP, Alistair McFadzean suggested the economic development agency could be "absorbed into the Scottish Executive".

He also said local enterprise companies could be abolished.

The new SNP government is committed to reforming Scottish Enterprise, which spends �500m a year of public money, but it has yet to announce details.

Radical approach

Last year a report into the economic development agency's performance found its achievements were not clear because of inadequate data and poor evaluation.

The auditor general for Scotland, Robert Black, cast doubt over the agency's previous performance claims.

The SNP has long been critical of Scottish Enterprise, which has its headquarters at Atlantic Quay in Glasgow.

The new government will be urged to take a radical approach by the Nationalist MSP Alex Neil, who is taking advice from a former senior manager at Scottish Enterprise.

The advice from Mr McFadzean, leaked to the BBC, said Scottish Enterprise could be taken over by executive civil servants.

He suggested reorganising the agency's core functions and putting the private sector in charge of some.

He said the local enterprise network could be abolished with alternative economic development offices set up in council buildings.

Mr McFadzean also suggested abolishing the Scottish Enterprise board.