The party's local election manifesto has pledged to tackle long-standing "gaps" in the city's cultural infrastructure "so that Edinburgh residents will be able to see their favourite bands and shows in their own city."
The arena idea – which is uncosted – has been revived despite previous proposals having come to nothing since the turn of the century.
The SNP’s pledges also raise the prospect of a revival for proposals to replace the historic Ross Bandstand in Princes Street, which has fallen into decline in modern times.
A Victorian bandstand was built in the park in 1877 to mark their official opening to the public and was replaced by a new “art deco” structure in 1935.
A design for a proposed replacement won an international competition instigated by the council five years ago, only for the project to run into trouble due to concerns about its potential impact on the existing gardens and how it would be operated.
The local election manifesto published by Labour, which has been in a coalition with the SNP for the last five years, includes a pledge to introduce a "presumption" against using public spaces and parks for commercial purposes "where there is not clear public support.” The Greens have also pledged to bring in better regulation over the use of “landmark spaces” like the Meadows, Inverleith Park and Princes Street Gardens for events.
The SNP's manifesto also commits the party to working with the Fringe and other festivals to expand their footprint out from the Old Town to help ensure a greater spread of "cultural benefits” to more communities.
West Edinburgh is believed to be the favoured option for a new indoor indoor arena for the city, due to its public transport network and access to the M8 motorway.
The SNP manifesto states: “We’re proud of Edinburgh’s status as the world’s festival city and all the benefits that brings.
"We have the highest participation in the arts of almost any community in the world. We’re proud of the diversity and multiculturalism our vibrant city contains.
“We’ll work with our world-famous summer festivals to ensure they emerge from the pandemic more sustainable and as vibrant as ever, while supporting and enabling the Fringe and other festivals out from the Old Town, spreading cultural benefits to more communities.
“Edinburgh has diverse and dynamic communities in all corners, not just in the city centre. We’ll promote and support community-led festivals and cultural events throughout the city by ringfencing funding and support for grassroots events.
“We’ll engage with the creative and hospitality sectors to identify gaps in the types and sizes of venues our city currently has to offer, including assessing demand for a new 10,000 capacity venue, so that Edinburgh residents will be able to see their favourite bands and shows in their own city.
"Working with community groups, we’ll facilitate a plan, by local people and for local people, for the Ross Bandstand in Princes Street Gardens, publicly-owned and operated for public good.”