The frontrunner for leader of the Scottish Conservatives plans to split from the UK party if he wins the leadership election next month.
The MSP Murdo Fraser says the Conservatives carry too much baggage in Scotland and claims a new centre-right party would attract more voters.
The party would sit with the Tories in the Commons but have its own policies.
Mr Fraser said David Cameron was aware and the idea had the support of several senior Conservatives at Westminster.
He told the BBC: "What we have to do is get many more people elected from Scottish constituencies to support David Cameron and a future UK Conservative government and the best way to do that is to create a new progressive centre-right with a Scottish identity."
He added: "I think that will be much more attractive to many people in Scotland who share our values."
The Conservatives have failed to revive their fortunes in Scotland since the 1997 general election, which saw them lose all 11 of their Westminster seats.
At last year's election, they only managed to retain one MP, David Mundell in Dumfriesshire, Clydesdale and Tweeddale.
Mr Fraser says the party has been in continual decline in Scotland since the 1960s and the best option was to create a new party.
His plans prompted Glasgow MSP Ruth Davidson to confirm she will contest the leadership and defend the present Scottish party.
She said: "I am proud to be a Scottish Conservative and Unionist.
"This is a destabilising distraction that will be welcomed by no one more than Alex Salmond.
"I've got the confidence to speak to Scots about the issues that really matter to them."
Ms Davidson, who was newly elected to the Scottish Parliament in May, is expected to make a formal announcement about her bid on Monday.
Mr Fraser can expect further opposition with the former Secretary of State for Scotland, Lord Forsyth, calling his plan a "ludicrous idea" which amounts to raising the white flag in the face of opposition from the SNP.
The MSP said his campaign slogan in the Scottish Conservatives leadership race was a "new party for Scotland".
"This is the central plank of my leadership pitch," he said.
"And what I'll be saying effectively is there is a lot of interest in centre-right values amongst people in Scotland but they don't vote for the Conservative Party."
The former Tory Scottish Secretary, Sir Malcolm Rifkind, described Mr Fraser's plans as "healthy" and "refreshing" and said his ideas should be given "serious consideration".
He said: "What is very, very healthy is that Murdo Fraser is not just raising this after he has been elected. He is saying if you want me as your leader this is the kind of way in which I wish to lead the centre-right cause in Scotland.
"He is saying this is not about one individual, this is an opportunity for the people who are Conservatives in Scotland to decide what is the future of the union and of centre-right politics.
"He is offering a very refreshing new start."
Scotland's only Conservative MP at Westminster, David Mundell, said he welcomed debate and discussion but would "take a very great deal of convincing" that Mr Fraser's ideas would help the party.
He said: "I think fundamentally changing the party name is a rather simplistic approach to the issues that we face.
"It is much more fundamental than that.
"It is about having a whole package of things that appeal to the electorate from policies, to the work that we do on the ground, to our approach in government."
Asked about the plan, UK Education Secretary Michael Gove - who was born and brought up in Scotland - said the Scottish Conservatives should be allowed to "choose their own destiny".
"It is a decision for the Scottish Conservative Party what its future should be," he told BBC One's Andrew Marr programme.
He denied the idea was merely an attempt at "rebranding" but a sign of a "revival, political and intellectually" of the centre-right in Scotland.
Jackson Carlaw, a West of Scotland list MSP, launched his campaign to be the next leader of the Scottish Conservatives on Friday.