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Scottish Labour is to rebrand itself as the "Irn-Bru of modern politics" with distinctive "made in Scotland" policies that will set it apart from the main UK party, party insiders have revealed.

The radical overhaul of the Labour image aims to turn the party into an iconic Scottish brand that will outflank the SNP's appeal to patriotism.

The plans are being considered in a radical review of the party after its devastating defeat at the Scottish elections, led by shadow defence secretary Jim Murphy and MSP Sarah Boyack.

In their determination to root the party in Scotland, senior Labour figures have even studied how Scottish products like whisky and Irn-Bru retain a solid Caledonian identity while appealing to a wider market.

Their ideas include creating an overall leader for the Scottish Labour Party who will be in charge of MSPs in Edinburgh and Scottish Labour MPs at Westminster for the first time.

The radical overhaul has already won support from party figures.

Glasgow Labour MP Tom Harris said: "It is simply not credible to stay with the status quo. This isn't a silver bullet. But I think we do need an iconic way of telling voters this is a new start and that our policies are made in Scotland for Scotland."

As well as binding MPs and MSPs together under one command structure, the review will also recommend the Scottish Labour Party continue financial links with the trade union movement.

Leader Ed Miliband is seeking to woo middle-England by distancing the UK party from reliance on big union funding.

As well as being taken apart at the election, the Scottish Labour Party cannot match the millionaire private donations being made to the SNP.

The Nats were recently bequeathed £1million by the late poet Edwin Morgan for their referendum campaign warchest and received £500,000 from bus tycoon Brian Soutar to outgun Labour during the Scottish election.

The Murphy and Boyack review will present its conclusions on reform by the autumn but the first stage of the party overhaul is set to be approved by MSPs and Labour MPs at Westminster this week.

It will include a new contract for Labour council candidates in next year's crucial local government elections, specifying minimum responsibilities for the party and voters.

A spokesman for the Scottish Labour Party said that "absolutely nothing has been agreed" on the question of an overall leader.

Iain Gray, the current Scottish leader, is under pressure to stay on as a caretaker until full agreement can be reached on a new party structure that will bring Westminster MPs and Holyrood MSPs together into one force.

Some of Labour's 41 Scottish MPs at Westminster are reluctant to be governed by a Scottish leader instead of a UK one.

There is also resistance to reorganising the grassroots party structure on Scottish parliament boundary lines.

But the scale of last May's defeat has persuaded MPs that a complete overhaul of the party is required if it is to hit back at the SNP at next year's local government elections.