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Both The Scottish Sun and The Times in Scotland have reported that the UK Government is set to effectively block the planned August rollout of Scotland’s deposit return scheme (DRS).

The reports said ministers south of the border intend to scupper the launch amidst concern over the potential impact of the scheme on inflation. They can do this by refusing to grant an opt-out from the UK’s Internal Markets Act, meaning the DRS regulations could not be enforced for single-use packaged drinks from elsewhere in Britain.

This would put Scottish producers at a massive competitive disadvantage because only products made in Scotland would be subject to the 20p deposit.

The Scottish Sun understands “the UK Government will reject the demands for an exemption to trading laws”.

What’s more, Westminster has confirmed that no formal request for an Internal Markets Act exemption has even been made by Holyrood, according to the newspaper.

In the meantime, Scottish Circular Economy Minister Lorna Slater reiterated that DRS is “definitely going ahead”.

Her statement comes despite all three candidates in the race to become her new boss as SNP leader – Humza Yousaf, Kate Forbes and Ash Regan – saying they would seek to postpone or amend the scheme.

Forbes warned the initiative needed to be re-examined in the context of businesses who were struggling with rising energy bills. Yousaf, odds-on favourite with the bookies to replace Nicola Sturgeon, said he would exclude small producers like craft breweries and gin makers from the scheme’s first year if elected, targeting larger businesses instead.

All this follows a warning from a cross-party group of MSPs that it would be “reckless” to introduce the DRS as planned in August.

The group included former Scottish rural economy secretary Fergus Ewing and veteran SNP MSP Christine Grahame; Conservative MSPs Maurice Golden and Brian Whittle; Labour’s Claire Baker and Paul O’Kane; and Liberal Democrat Liam McArthur.

They wrote to the outgoing First Minister with “extensive and wide-ranging concerns” about the scheme, highlighting a Scottish government review published in December that “identified that the scheme cannot be made to work as planned in August”.

The MSPs said about 600 SMEs have expressed fears about the scheme, adding that the rules and costs could force many to close, and warned that drinks firms could withdraw from the Scottish market.