Hospitality and tourism bosses have said the Home Office rejection of its pleas for a separate Scottish visa to attract overseas workers north of the Border is a "massive blow".

It was reported on Wednesday that Sir Keir Starmer's government was considering the measure after the need to attract workers in some sectors in Scotland was raised in the Commons on Tuesday.

However, the Home Office swiftly denied the accuracy of the report in The Times and said it was not planning to introduce the policy.

“This is not government policy and not something the Home Secretary is considering," a Home Office spokeswoman told The Herald.

Leon Thompson, the executive director of UKHospitality Scotland, said he was "very disappointed" when he read the policy was not being pursued.

"The hospitality and tourism industry across Scotland have been calling for a Scotland visa for some time.

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"We believe it is really one of the ways in which we can help address the skills and workforce shortage that we have in the industry, particularly but not exclusively in rural areas where we have depopulation and declining population of working age which is making it incredibly difficult for businesses to operate to optimal level. They just cannot get the workers and the people with the skills to offer the service our guests and visitors are looking for," he told The Herald.

"It is very very disappointing indeed. Certainly there have been lots of conversations with the Scotland Office about the need for this approach for Scotland.

"So this does make things difficult in terms of how businesses will look at filling gaps and vacancies and indeed looking to expand if we don't have a greater degree of flexibility on migration policy here in Scotland. The Scottish visa would have been absolutely central to that.

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"So we are very disappointed to learn that the UK Government is not considering this at all. UK Hospitality Scotland will continue to raise the issue with the Scotland Office.

"We will continue to be part of discussions with the Scottish Government as well. Hopefully we can move forward in a more positive way than communicated by the Home Office."

He added: "There needs to be some further conversations at how we have arrived at a situation where it is not being considered at all when it was part of the conversation before the election. Nobody expected anything like this to happen quickly but to see it taken off the table altogether will be a blow to the sector."

Stacey Dingwall, head of policy and external affairs at the Federation of Small Businesses Scotland, said she hoped that after the UK Government had rejected a Scottish visa, an alternative approach to address the recruitment challenges faced by businesses could be found.

"Given the ongoing challenges rural and remote small businesses face in terms of accessing sufficient local staff, we have been supportive of calls for the UK Government to introduce a rural visa pilot scheme, such as that proposed by the Scottish Government," she told The Herald.

"If the UK Government is not willing to commit to a specific visa scheme, then we would hope to see proposals for an alternative method of tackling this significant issue for Scottish small businesses, in order that they can have confidence the new government is taking this very real problem for rural and remote areas as seriously as they should be".

The initial report suggesting the UK Government was considering a Scottish visa arose after the SNP raised the issue of a Scottish visa during at a Westminster debate on Tuesday.

Responding to the SNP MP Stephen Gethins, Scottish Labour MP John Grady said Starmer's administration was "absolutely determined" to attract "talented people" to Scotland.

A previous proposal from the Scottish Government for a pilot scheme which would exempt certain businesses from UK rules on hiring overseas workers was blocked by the former Conservative administration.

Scottish Labour's general election manifesto, external pledged to reform the UK migration advisory committee and to ensure migration and skills policies “work for every part of the UK”, while ending “long-term reliance on overseas workers in some parts of the economy”.

In the days leading up to July's vote, Scottish Labour deputy leader Jackie Baillie told the Herald on Sunday, her party would look at ways to "incentivise" migrants to the UK to settle in Scotland.

Days after the election, Scottish Labour leader Anas Sarwar was asked if he would push the Prime Minister for a distinct immigration system north of the border.

He told BBC Scotland's Sunday Show: “No. We have to have one UK border agency, of course we need one immigration system.”

SNP MP Stephen Gethins will table a bill on Thursday seeking an amendment to the Scotland Act 1998 to enable the Scottish Government to set up a Scottish visa.

He said it would allow Holyrood to "tackle the Brexit-born staff shortages that have inflicted pain and hardship upon our NHS and Scottish businesses".

The Home Office declined to comment on Mr Thompson's and Ms Dingwall's comments.

The Scotland Office said it was a matter for the Home Office.