Scottish council elections: Labour strikes power deal with Tories By BRIAN FERGUSON Published on Monday 7 May 2012 00:07 LABOUR has agreed deals with the Conservatives to take charge of at least two councils, with coalition talks also taking place between the parties at Edinburgh city council, The Scotsman has learned. Sources said the two parties were close to forming an alliance to seize control of the capital from the SNP, which has been in coalition with the Liberal Democrats for the past five years. The development came as Labour began taking control of a number of hung councils around the country on Sunday night, with deals reached with the Tories for the party to lead administrations in East Lothian and Inverclyde. Labour is also confident it will take control in Aberdeen after emerging as the largest party last week. The deals between pro-Union parties come as the SNP prepares to launch its "Yes" campaign later this month for the independence referendum. However, First Minister Alex Salmond and Labour leader Johann Lamont gave their respective council groups around Scotland the go-ahead to strike deals with each other. The first Labour-SNP council alliance emerged, in East Renfrewshire on Sunday. In Edinburgh, Andrew Burns, leader of the Labour group, confirmed that talks had taken place with all four rival parties. However, the Greens, who doubled their number of councillors to claim six seats, have signalled a reluctance to be part of any formal partnership. And it is thought a deal between the Labour and Tories may stop short of a formal coalition, amid concern such a move would spark anger among supporters of both parties. Labour is said to be offering key posts to rival councillors in return for some form of support. Securing the backing of the 11 Tories would give Labour's 20 councillors a firm majority to run the capital - and would not need the backing of the Greens. Labour insiders expressed concerns over how a pact with the Tories would play out with supporters, particularly when the party is trying to revive its fortunes at Westminster. But sources said the bigger issue was the prospect of the independence referendum in two years" time. Mr Burns said: "We are speaking to the Tories, but we are also still speaking to all the other parties and absolutely nothing has been ruled out. We are still looking at whether a coalition of talents or a rainbow alliance is possible. Tory group leader Jeremy Balfour said: "We are still involved in talks, but any agreement is days, rather than hours, away. There is a long way to go. A total of 26 councils ended up with no party in overall control, as a result of the single transferable vote form of proportional representation. Talks are taking place across the country to determine where power will lie. Mr Salmond said local parties would be free to determine how they discussed power-sharing. "Our council groups are free to make alliances with any other democratic party," Mr Salmond said. The First Minister said his party won the election nationally, gaining most councillors overall and a higher share of first preference votes. But the SNP did not take Glasgow, its key target, and ended with fewer seats than Labour in Aberdeen and Edinburgh. Ms Lamont also said she was "very clear" that Labour councillors had free rein to speak to all parties. The Nationalists narrowly won the popular vote from Labour last Thursday, but the margin of victory was well down on the Holyrood landslide last year. The SNP finished the election with 424 councillors, gaining 57 compared with 2007. Labour increased its number by 58 to secure 394 councillors. The Tories fell 16 to 115, while the Lib Dems dropped 80 to fourth place with 71 councillors. The Greens gained six to finish with 14 seats, including six in Edinburgh. In Aberdeen, Labour's victory could spell the end of the Union Terrace Gardens development. The party has been sceptical about the outcome of a recent referendum, which voted narrowly in favour of plans to raise the level of the sunken gardens to create a civic square. Oil tycoon Sir Ian Wood has been driving the scheme and is providing £50m of his own money for the £140m project, with a further £35m from the Wood Family Trust. But the Labour leader Barney Crockett, said: "We've been consistent in our scepticism about the proposals put forward based on the figures, and we will remain consistent on that. The referendum was always ostensibly about giving information to the Scottish Government about what support there might be for it. But it was highly contested in the accuracy of the information put out and the publicity. Coalition talks in Aberdeen will get under way later today, but deals elsewhere have already been struck. Labour have seized East Lothian from the SNP after reaching a deal to work with the Tories and independents. Labour also looks set to remain in power in Inverclyde as a minority administration after informal support was reached with the Tories and independents. Labour and the SNP have agreed a deal to work together in East Renfrewshire, where a similar coalition has operated in recent years. Meanwhile, the Nationalists are confident they will end generations of Labour control in Midlothian after agreeing a deal with independent Peter de Vink. With the referendum "Yes" campaign weeks from being launched, Ms Lamont insisted the Nationalists" focus on the constitution cost them in some parts of the country. "We made, frankly, the mistake in 2007 that it looks as if the First Minister's making now - not looking and listening to what people are saying," she said.