The Scottish Parliament should restore greater financial autonomy to local government, the Scottish Local Government Information Unit said in a discussion paper.
A working group, set up by the unit to consider the underlying principles of the Scottish local government bill due later this year, says subsidiarity should be the key to the new constitutional settlement.
It argues local government will be revived if given new powers and the freedom to act in the best interests of local communities.
It says the principle of subsidiarity should allow local democracy to extend to local communities, with councils given the power to delegate decision-making and budgetary powers to local forums.
Launching the report, Jean McFadden (Lab), SLGIU convener, said: 'It is clear that, although the relationship between local government and the Executive has improved since the creation of the Scottish Parliament, Scottish local government has deep-seated problems that will not be solved merely by being on better speaking terms with central government.
'In the absence of legislation providing intellectual underpinning and coherence to local government modernisation, there has been a piecemeal, process-intensive approach to its implementation.'
The report is being sent to the Scottish Executive and the Scottish Parliament's local government committee in a bid to influence the content of the Scottish local government bill before it is published.
- Reviving Scottish Local Government (£6.50) is available from SLGIU, Baltic Chambers, 50 Wellington Street, Glasgow G2 6HJ.