ED Miliband has made clear Labour in Scotland faces a "big challenge" but can defeat the surge of the SNP - whoever wins the leadership contest tomorrow.

It has been suggested the UK party leader's fate at the General Election could rest on how well Labour does in Scotland and whether or not it can stem the Nationalist tide. Indeed, Jim Murphy, the frontrunner for the Scottish Labour crown, claimed this week that Scotland would hold the UK's future in its hands for the second time in 12 months at the May General Election.

Speaking in the City of London after his keynote speech on the economy, Mr Miliband declined to say who he was backing, noting: "We will see what the result is on Saturday."

Sources at Westminster have suggested the fact Margaret Curran, the Shadow Scottish Secretary, came out to endorse Mr Murphy could be regarded as proxy support on behalf of the UK leader.

But, when asked if Scottish Labour could burst the SNP bubble and win in Scotland, Mr Miliband replied: "We face a challenge in Scotland. It's a challenge we can meet with our new leader; whoever is elected on Saturday."

Insiders claim Mr Murphy, the former Scottish Secretary who represents East Renfrewshire, is set to win the parliamentarian section of the party's electoral college while leftwinger Neil Findlay, the Lothian MSP, will pick up most votes in the trade union section. Victory could, therefore, rest on which of them gets the lion's share of the members' votes.

Their colleague Sarah Boyack MSP, who is also a candidate, is not expected to win.