Plans to introduce Celtic and Rangers B teams into League Two for the start of next season are being finalised for a vote by SPFL clubs.
Two teams each from the Highland and Lowland Leagues would also be added to expand the fourth tier to 16 sides.
A strategic partnership between Premiership clubs and lower-league teams is also being looked at.
The working group, with representatives from across all four leagues, hope a vote will take place next month.
Under the proposal, the maximum age for players in the B teams would be 21 and those sides would not be allowed to be promoted above League One.
B teams are used in Germany, Portugal and Spain and have provided a pathway for players to first team and international football.
However, it is less common in countries of Scotland's size, although Croatia are one proponent with Dinamo Zagreb, Hadjuk Split and Osijek all having second teams in the second tier.
The group was set up last summer with the remit of 'Making Scottish Football Better' and their detailed proposal has now been passed on to the Professional Game Board within the Scottish FA.
Included in the proposals:
- Clubs in Leagues One and Two to benefit by at least £100,000 over five-year period
- Loans of under-21 players between clubs can be increased from two (current) to five
- B teams will be able to play in Challenge Cup but not the Scottish Cup or League Cup
- B teams will have no voting rights and no rights to any distribution money
- The only change to the financial model would be teams in first and second place in the Premiership, who would forego £290,000 for the first five seasons.
The group say at present there will be no changes in terms of the current set-up for the Premiership, Championship and League One - however there is a commitment to review in the future.
The existing pyramid system would also remain in place from next season, with the bottom club in League Two playing against the winner of a play-off between the winners of the Highland-Lowland League play-off.
The proposals must be approved by both the SFA and the SPFL boards prior to the clubs being asked to vote at a special general meeting.
'Not Scottish football's job to develop Celtic and Rangers players' - analysis
Former Celtic, Monaco and Scotland midfielder John Collins on Sportsound
I've worked at Celtic, I've seen the reserves, the under-21 teams. They win 3-0, 4-0, 3-0, 4-0 - there is no development. If they're getting beat 1-0 against League Two teams, now they're getting tested. Can they still make the right decisions under pressure? I think it would add to League Two.
Former Hearts and Scotland manager Craig Levein on Sportsound
The development of players goes from the age of five up to 19 or 20. It's the ages 17, 18 and 19 where we struggle. Half or a third of the Scotland under-15 team is made up of Old Firm players. When you get to Scotland Under-21s, how many Old Firm players are playing? Very, very few because they don't play first team football when they need to.
Peterhead manager Jim McInally on Sportsound
I was at Celtic as a youth coach. The onus is on Celtic and Rangers to develop those players. I don't think the onus is on Scottish football to develop Celtic and Rangers' best players. You need to play with men, it's not just playing against men.
Partick Thistle defender Richard Foster on Sportsound
The change away from reserve football has been a big issue. You would play with players who have dropped out the first team. One of my first Aberdeen reserve games was against Celtic and I played against Neil Lennon, Paul Lambert and Bobby Petta as a 17-year-old boy. I think that's a better way forward.
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