Labour and Liberal Democrat MSPs are among members of the committee who are strongly critical of the executive for rejecting the fundamental review of local government finances recommended by the McIntosh commission last year.
Trish Godman, the chair of the local government committee, said: 'We are disappointed that the executive has rejected McIntosh's recommendation ... The unanimous view of Scotland's 32 councils is that the time has come for a major review of the finance system and the committee backs this position.'
Saying that the committee has urged the executive to commission an independent review, Ms Godman added: 'We have further agreed that, should the executive fail to agree to a review, we will consider how best to counduct our own review using the resources available.'
MSPs on the committee have also given their backing to the case by councils and the McIntosh commission for a power of general competence to be given to local authorities. That would give councils greater freedom to carry out innovative projects on behalf of the communities they represent.
Jack McConnell, the Scottish finance minister, said last night he was determined to improve the allocation of grants to local authorities and the guidelines for council spending.
He added: 'I believe that this is best done in partnership with the councils and MSPs on the local government committee.'
The MSPs side-stepped the issue of whether a proportional system of voting should be introduced into local government, deferring their conclusions until they hear the recommendations of a local democracy group set up by the executive.