Scotland could become a poorer country than Greece or Portugal within the next 50 years, according to economists.

The Centre for Economics and Business Research said the country needs more entrepreneurs and tax incentives to encourage companies and investment.

The experts also said there should be greater deregulation, allowing businesses to flourish without the burden of red tape.

The report calls for less red tape

In their report, Douglas McWilliams and Richard Greenwood said Scotland had failed to fully enjoy the benefits of the consumer boom in other parts of the UK.

Agriculture, a key industry, has suffered because of last year's foot-and-mouth outbreak and the terrorist atttacks on the US on 11 September have deterred tourists.

The "global technologies slowdown" has also had a negative impact on Scotland's 'Silicon Glen'.

However, the economists stressed that weak economic performance is not a recent problem.

They said: "Scottish growth since 1995 has averaged only 1.9% compared with 2.7% for the UK as a whole.

"Scottish manufactured exports are running at a lower level than four years ago while the number of people living in Scotland has been falling since 1995.

No quick fix

"If present rates of growth are projected ahead, Scotland within 50 years will be a poorer country than Greece or Portugal and not a long way ahead of Poland or Turkey."

The economists said Scotland suffers from a "lack of entrepreneurship culture" and they urged Scottish banks to offer more support to business start-ups.

They called for a "tartan tax" reduction of three pence which would mean less public spending but would encourage a more efficient economy and a reduction in red tape.

While the report said there would be no quick fix, it stressed that the suggested measures would start to "turn the economy round".