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The city council will now submit its controversial proposals to the Scottish Government – and ask for assurances that the funding is additional to any budget cuts from Holyrood.

There was a mixed response from politicians and the tourism industry to the development – which will see visitors to the city pay up to £14 on top of their holiday costs.

John Donnelly, chief executive at Marketing Edinburgh, said: “Whether you support or oppose TVL [transient visitor levy], the facts are irrefutable; we have a growing need to protect areas of economic value yet a dwindling pot of money to do so.

New Year 2019 - New Year's Day tourists on The High St on a guided tour

“As indicated by the council’s budget proposals, the public sector can’t fill the gap – and the private sector has shown little appetite to. Something has to give. Solving the problem means we can continue to invest in world-class festivals, protect our built environment and support the promotion of the city, all of which are crucial to building a bright future for Edinburgh.”

But Conservatives blasted the “lack of detail” and labelled the scheme “a garden tax in shorts and T-shirts” following the problems the council faced implementing its new garden waste charge.

As part of budget negotiations with the Scottish Greens in Holyrood, the Scottish Government has indicated that councils will be given powers to bring in a tourist tax or TVL, which is widely used across mainland Europe.

Council leader Cllr Adam McVey assured councillors that “it will be additional to our resources as a city”, describing it as being “for the benefit of our city as a whole”.

Pictured is John Donnelly (Chief Executive of Marketing Edinburgh). Pic: Greg Macvean

He added: “Unless we find a sustainable way of financing the things we use as a city and keep the tourism going, we will start to see a threat and detriment to that experience.

“We are already seeing pavements congested and we need to find better ways to manage it all.

“It will be set locally, collected locally and spent locally. We will collect it for the benefit of our city as a  whole.”

The Capital’s tourist tax proposes a flat £2 per night room charge, an exemption for campsites and a cap of seven consecutive nights.

The charge would apply to “all paid accommodation” across the Capital, including short-term lets and hostels.

Conservative council members called for more information to be gathered before pressing ahead.

Cllr John McLellan, who tabled the Conservative amendment, said: “There’s widespread concern the money will dissolve into the council funding pot or be clawed back by the Scottish Government.

“We are being asked to approve something that the only detail is the pound signs in the eyes of the administration”

Fellow Conservative, Cllr Joanna Mowat, added that the Conservatives want “a costed plan” with full details of any implications.

She added: “The report asks us to set a fee of £2. We don’t know how much it’s going to cost to collect or how many people we will be collecting it from. We don’t know how much this will raise and what we can use it for.”

Green and Liberal Democrat councillors supported moving the plans forward, on the condition that any revenue gained is additional to funding passed on from the Scottish Government.

Green Cllr Claire Miller said: “We need to design a TVL that’s suitable for our city.

“We have to be really clear that these revenues raised are new tax money. We need to nail down exactly what it will be paying for.”

Liberal Democrat Cllr Kevin Lang added that TVL will help “visitors of Edinburgh make a more appropriate contribution to the success of the  city”.

Cllr Lang added that the Conservative position on the tourist tax is “utterly perplexing” and that the party is “totally out of touch with public opinion”.

Greens and Liberal Democrats backed the adminstration’s plans, subject to assurances that revenue raised will be additional, rather than the Scottish Government “lopping off more and more from the revenue grant”.

Conservative group chairman Cllr Jason Rust warned that the council must get the tourist tax right.

He said: “Under the proposals, a B&B in Colinton would be treated the same as the Balmoral.

“We don’t know what form the legislation will take. The last thing we need is another garden tax in shorts and T-shirts.”

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Edinburgh will be first in UK to impose £2-a-night tourist tax