Scottish Labour leader Kezia Dugdale has backed a union's calls to write off Scottish council debt which pre-dates devolution in a bid to ease cuts to services.
Unite Scotland estimates the debt is around £2.5bn. Speaking at the union's policy conference in Clydebank on Saturday, Ms Dugdale said cuts to councils were unacceptable.
Also at the conference, Jeremy Corbyn told Scottish voters he leads a changed party and attacked the SNP's "cuts to Scottish council budgets."
The SNP said Ms Dugdale's position was "hypocrisy" and Labour in Westminster were "hopelessly divided." The First Minister Nicola Sturgeon is due to speak at the conference on Sunday.
Ms Dugdale said: "I have met with Peter Lawson, Unite convenor at Edinburgh City Council, to discuss the union's local government debt amnesty plans.
"In particular we have looked at the servicing of debt owed to the Public Works Loans Board within the UK Treasury, and the rates being paid to service pre-devolution debt are extraordinary.
"Take for example Dundee City where the equivalent of 55p from every pound raised through council tax is being spent on servicing pre-devolution debt.
"This is a council which has just offered thousands of voluntary redundancies, and scrapping the pre-devo debt could save as much as £36m over the next three years.
"Devolution was to be a fresh start, a new beginning and yet this historic interest is still a millstone around the neck of councils who are facing Scottish Government cuts.
"If the Scottish Government were serious about ending austerity they'd make the case right now for the interest on this debt to be dropped."
Ms Dugdale also accused the SNP of "sitting on their hands" and allowing the Trade Union Bill to be enforced in Scotland.
She said: "We offered to work with the Scottish Government, to secure a Legislative Consent Motion which could allow Holyrood to block key parts from reaching Scotland. But when the Presiding Officer blocked that route, we did not stop.
"Instead Scottish Labour MSPs took direct action. Every Labour MSP lodged topical questions, to guarantee one was taken, which challenged the presiding officer's ruling, and at that sitting.
"Labour MSP after Labour MSP made points of order challenging that ruling. And while one Labour MSP was eventually suspended from the chamber, not one single SNP member spoke up.
"Now conference I will work with anyone in Holyrood to stop this bill, but that is not a sentiment that is being shared by the governing party who have the parliamentary majority."
Mr Corbyn described Scottish Labour leader Kezia Dugdale as "a fantastic leader who is rebuilding our party", in his speech to conference in Clydebank.
He said: "I'm not saying that the Labour Party has never got things wrong in the past.
"It certainly has and I have been in parliament long enough to be very proud of many things that have been achieved, but also felt that we let people down in private finance initiatives and many, many other issues like that.
"But I have to say also that the Labour Party is a changed place at the present time. The Labour Party standing in the May elections is a different party with a renewed sense of social justice at the heart of our party."
An SNP spokeswoman said: "Given that it was Labour that drew up and established the 1999 Devolution Settlement and could have cancelled this debt at the time it is hypocrisy for Kezia Dugdale to suggest that it is the SNP that needs to act now when it was in the gift of her predecessors to give Scotland the fresh start it deserved.
"And while her Labour Party colleagues in Westminster remain hopelessly divided it is the SNP that is providing real and effective opposition to the Tories, including the Dickensian Trade Union Bill.
"Kezia Dugdale should ask Jeremy Corbyn to support the SNP's calls for trade union laws to be devolved as Labour voted to leave these powers in David Cameron's hands, instead of allowing the Scottish Parliament to take a new and better approach, giving him carte blanche to undermine unions in Scotland."