The Scottish Nationalists have called for controversial PFI schemes to be scrapped and replaced by not-for-profit projects.

In a keynote speech on public services, SNP leader John Swinney said his party was determined to set out a viable alternative to involving the private sector in public services.

He said the SNP-led Falkirk council was to bring forward a £55 million pound not-for-profit school rebuilding project, and challenged Labour first minister Jack McConnell not to block the plan.

He said investment should be to the benefit of pupils, patients and the whole community, not private shareholders.

"Under PFI the nation's assets are reduced to the status of cash cows for the private sector. Under a not for profit trust the nation's assets perform a very different role - to enhance the life of Scotland and its people as a whole," he said.

He urged McConnell to "end your instructions to local authorities to go down the PFI road".

The SNP leader said the not-for-profit approach should be adopted on a national scale and urged local authorities across Scotland to follow Falkirk's lead.

"The greater the number of not for profit projects, the greater the value for the tax-payer and the greater the money available for school pupils, and the greater the life-chances of Scotland's children."

Swinney said the move marked the launch of his party's quest for victory in the 2003 elections to the Scottish parliament.

"Today marks the start of a concerted campaign to put the not for profit trust ideal at the heart of the SNP's charge for victory in 2003.

"It is an ideal I am confident will resonate with the people of Scotland. It is an ideal that is true to the Scottish tradition of community and public service," he said.