Transport projects were said to be vital to development

CBI Scotland and the Institute of Directors Scotland said the SNP administration had made a "fairly good start", but there were still concerns.

Iain MacMillan, CBI Scotland's director, welcomed the government's economic strategy and growth targets.

But he expressed concern over transport links and opposition to nuclear power.

In his New Year message, Mr MacMillan said the government, which came to power in May, had started well in terms of policies for business and the economy.

'Right policies'

He praised ministers for setting a target for growth in Scotland to match the UK's economic growth rate by 2011.

And he praised the government's commitment to completing vital road and rail infrastructure projects.

But he said concerns included ditching plans for a rail link to Edinburgh Airport.

Mr McMillan also said proposals to scrap the council tax and replace it with a local income tax were "misguided".

He said: "I do hope that the Scottish Government will prove to business that it really means what it says about adopting the right policies to make Scotland competitive and grow its economy.

"The jury is still out."

David Watt, the executive director of the Institute of Directors (IoD) Scotland, also expressed concern about the Edinburgh Airport rail link decision.

He stressed the important of investing in transport infrastructure to the economy.

He said: "Weaknesses in transport and infrastructure can hold back businesses and have a huge impact on the economy."