Scotland’s business leaders have told Nicola Sturgeon that her plan to announce income tax increases next week risked inflicting major damage to the economy that “could take years to repair.”

The First Minister was warned at Thursday night’s Scottish Chambers of Commerce (SCC) annual dinner in Glasgow that "a competitive Scotland cannot afford to be associated with higher taxes than elsewhere in the UK".

Tim Allan, the organisation’s president, used his keynote speech to warn her against careering towards tax rises at a time of "sluggish" growth without carrying out independent assessments of the potential impact.

In her speech, Ms Sturgeon told the business leaders that extra spending on “first class public services” would help their companies as “the two can be mutually supportive.”

But Mr Allan warned that, unless the additional tax revenues were ring-fenced for economic growth and job creation, the lost international investment in Scotland would be “incalculable” and long term. He pleaded with her for a “level playing field with the rest of the UK.”

His outspoken warning came ahead of next Thursday’s Scottish Budget for 2018/19 at which Derek Mackay, the SNP Finance Minister, is expected to unveil income tax hikes for middle and high earners.