KEZIA Dugdale has launched a consultation on whether to create an independent Scottish Labour party in the wake of last month’s crushing Holyrood election defeat.

Going it alone is one of the “options for reform” contained in a document circulated to members last week.

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Dugdale, who has led Scottish Labour for less than a year, is trying to heal her party after coming third behind the Tories on May 5.

Her party lost ground in nearly all of the 73 first-past-the-post seats and lost over 30% of their votes compared to the previous Holyrood election.

The Sunday Herald has learned that Labour launched an internal “autonomy consultation” last week with a closing date of June 17.

Dugdale and UK leader Jeremy Corbyn issued a “statement of intent” in October that backed giving the Scottish party more powers.

A joint sub-group of the party’s National and Scottish Executive committees was established in March to consider the detail.

Scottish Labour currently has operational autonomy but is firmly wedded to the UK structure.

Senior party figures have argued that this constitutional link has been damaging electorally, while others believe weakening the ties 'panders of nationalism'.

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The consultation states: “There are a number of reforms that could be considered to deliver the vision set out in the Leaders’ joint statement. Some of these are discussed below, but members, CLPs and affiliates are free to add further issues in their discussions.

“Other than the status quo, there are a number of broad approaches to reform. At one end of the spectrum is further devolution from the UK party and at the other, the creation of an independent Scottish Labour Party.

“In between is a ‘federal-type’ option where members belong to the Scottish Labour Party first and foremost, and agreement is reached over which matters and procedures are best shared on a UK basis.”

It is understood one drawback of an independent party would be the requirement for Scottish Labour to fund its own ‘backroom’ services.

The Scottish party benefits from UK-wide resources on staffing, human resources, campaign infrastructure, membership systems and compliance.

The document flags up the consequences of cutting ties: “Significant consideration would need to be given to the cost of setting up or replicating systems for Scotland alone, before any final decision is taken.”

The multiple options are believed to reflect the range of views in the party, with Dugdale favouring greater autonomy and her deputy Alex Rowley backing a federalist-style solution.

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Another issue raised in the consultation is the prospect of Scottish Labour determining all its own policy positions, even on matters reserved to Westminster.

Members have been asked to comment on the mechanism that could resolve policy differences between Scottish and UK Labour.

Final proposals will be decided at the UK Labour conference in Liverpool in September and “consequential” rule changes will be agreed at Scottish conference early next year.

SNP MSP James Dornan said: "We've had so many announcements after elections over the last nine years that the Scottish Labour party is getting more autonomy it's a wonder it isn't independent already.

"Labour still don’t get it. Tinkering with names and structures does not address the failure that has got them to such a dire position.

"The 'branch office' mentality stills holds, with Labour in Scotland - but their core problem remains the same - they would still prefer a Tory government at Westminster making major decisions for Scotland instead of an independent government in Scotland.''

A spokesman for the Scottish Conservatives said: "After Labour's woeful election showing, it's no wonder they've embarked on this course of soul searching. But this is a party which ultimately blames the electorate for its failings. It won't take responsibility for its own punitive policies and arrogant complacency which has dogged it for generations, and will take years to shake."

A Scottish Labour spokesperson said: "Kezia Dugdale has already done so much to renew the Scottish Labour Party, from re-democratising party conference, to our radical policies. This consultation is the next step in that process of renewal, which will allow us to continue to work in partnership with our friends and neighbours in the rest of the UK whilst showing clearly that we are a distinctive party of Scotland."