South Lanarkshire Council, with the backing of the Convention of Scottish Local Authorities, has lodged a petition for a judicial review of the guidance in the Court of Session.
It will argue that scottish secretary Michael Forsyth has exceeded his powers by imposing legal duties on local councils which are inconsistent with primary
Keith Geddes, president of COSLA, was keen to stress that the case was not about councils' relationships with the private sector. Instead, he described the issue as one of important constitutional principle.
'We do not believe that a secretary of state can decide to change the meaning of the law to suit his own political ends,' he said. 'If local government does not stand firm, this particular issue will simply be the thin end of the wedge.'
However, Scottish councils also hope legal victory would knock out key sections of the CCT guidance issued in near identical form in the UK on 2 April this year.
These required councils to consult the market as part of a pre-tendering exercise for all future CCT contracts and to take into account any representations from the market about the way in which work is selected or packaged for competition.
Acting on advice from Andrew Hardie QC, South Lanarkshire will argue that this has the effect of imposing a positive obligation on councils, in contradiction to the 1980 and 1988 CCT acts which impose only the negative obligation that councils must avoid conduct which is anti-competitive in nature.
Lesley Courcouf, assistant secretary of the Association of Metropolitan Authorities, said that English councils were very interested in the outcome of the case.
'We feel it is up to the private sector to apply for work when it is advertised,' she said. 'Over the years ministers have got more interested in councils creating markets - to the extent that we are almost at the stage where if a council fails to get a good response to a tender advertisement, that in itself is anti-competitive.'
Newcastle MBC had considered mounting its own challenge to the guidance but had decided not to take action.
Director of administration Henry Warne said the council was now waiting with interest to the regulations on extending white-collar CCT due to be issued shortly.
Jon Harris, head of policy for COSLA, said member authorities were being circulated with details of the legal challenge as LGC went to press. COSLA would co-ordinate support across Scotland.
South Lanarkshire has already successfully challenged the scottish secretary once in the courts this year over his plans to lift a CCT moratorium from January 1997.