Local taxes could raise hundreds of millions of pounds in funding for cash-strapped public services, according to a new report.

Think tank IPPR Scotland said it would also help ministers achieve key priorities such as tackling climate change and making work fairer.

It urged MSPs to consider introducing "new and innovative forms of taxation" and said the Parliament's powers over local taxation offered "perhaps the best opportunity" to achieve this.

There appear to be "few" legislative barriers to bringing in new local taxes, provided money raised goes towards local authority expenditure, IPPR Scotland said.

While a new report from the think tank proposed a local inheritance tax, carbon tax and fair work supplement as some examples, it stressed the aim of the paper was to "outline what might be possible and pose questions for discussion and illustrative ideas for debate".

The 1998 Scotland Act "devolved very wide powers when it comes to local taxation in Scotland to the Scottish Parliament", it noted.

IPPR Scotland director Russell Gunson said: "The potential for our local tax powers has in many ways been overlooked in recent years but in Scotland we can do more - and we should."

A local inheritance tax could raise up to £200m of additional money for Scotland if it had a 10% marginal tax rate above a threshold of £36,000, IPPR Scotland said.

This could potentially rise to £300m a year if there was a 20% marginal rate for estates worth more than this that do not currently pay UK inheritance tax.

The report went on to suggest a local payroll tax - or low pay levy - could be charged on employers for those workers earning up to £8,632 a year, who a re currently not subject to National Insurance.

This could bring in up to £600m a year in revenues, if it was set at a "marginal rate" of 3.8%, IPPR Scotland said.

The think tank also suggested a carbon tax could be brought in, similar to a scheme that already exists in Canada, with the money raised going to councils to help fund carbon reducing measures.

Such local taxes could "offer opportunities to strengthen Scotland's tax base, deliver behavioural change in line with key Scottish government priorities and provide crucial additional public funding", the report said.

The report said: "Using local tax powers could allow the Scottish Government to introduce new taxes that broaden the Scottish tax base, which is currently dependent on taxes on earnings and on property taxation.

"This could better future-proof Scotland's public finances against disruption in the economy, climate change and demographic change, not to mention better protected from cross-border flows in taxpayers between Scotland, the rest of the UK and the rest of the world. "

Mr Gunson said: "Scotland has led the way in using its powers to create a more progressive income tax system.

"But if we want to go further, using our older powers over local tax could be crucial. "The Scottish Parliament is beginning to wake up to this, including through proposals for a tourist tax, but so far these ideas are small in scale."

He added: "New taxes could see us put our money where our mouth is on the huge priorities facing Scotland. "Our politicians should be far more ambitious on tax, thinking bigger to build a stronger, more progressive tax system that better narrows wealth inequalities, tackles environmental breakdown and delivers a fairer economy."

A Scottish Government spokeswoman said: "We welcome this IPPR report on potential new local taxes.

"We are committed to making local taxation more progressive while improving the financial accountability of local government.

"The local tax reform measures we announced in January - should they be agreed by Parliament - will deliver the most significant fiscal empowerment of local authorities since devolution."

She added: "Discussions around the further fiscal empowerment of local authorities are ongoing as part of our Local Governance Review.

"As the IPPR report notes, its aim is to outline what might be possible and pose questions for discussion and illustrative ideas for debate."