THE future of business rates in Scotland will be decided by the new Parliament. Until the MSPs meet and decide their priorities, nobody knows how they will exercise their power over this controversial source of revenue.

One possibility would be for the Parliament to devolve its rating power to local authorities - a move which would dismay business, according to Bill Anderson, Scottish secretary of the Federation of Small Businesses.

He says: ''The possibility of business rates being returned to the control of local authorities scares the pants off Scotland's business leaders, who are afraid of a return to the bad old days, when spendthrift councils used business rates as a milch-cow.

''It has just been announced that in England and Wales the business rate won't be returned to council control, although local authorities may be allowed to levy a supplementary business rate. This could be an acceptable solution for Scotland, too.

''In the end, it will all depend on who is elected to the Scottish Parliament and the composition of the voting

proportions.''

Meantime, business organisations will be campaigning for a centrally-controlled uniform business rate (UBR) on a level playing field with England and Wales.