Flagship plans for a Scottish investment bank will only "tinker at the edges" of the country's struggling economy because it proposes a fraction of the funds needed to bring about lasting change.
The new bank will provide £2 billion for Scots firms over the next decade - but Labour has said £20 billion is needed to transform the economy.
There are also fears that it will only add the "cluttered" landscape of economic policymaking in Scotland which experts say is holding back growth.
Nicola Sturgeon announced recently that the new bank will be up and running next year, after the success of similar institutions around the world including the Kfw Germany. Funding of £340 million has been pledged so far with up to £2 billion over the next ten years.
Read more: Scottish National Investment bank will launch by 2019
But Labour's economy secretary Jackie Baillie told MSPs: "I don't believe that this will create the kind of transformational change we all want to see in the Scottish economy.
"In contrast Scottish Labour would invest £20 billion over the same period in the Scottish investment bank - ten times the amount proposed by the Scottish Government."
The money would be directed to smaller firms which make up the "overwhelming majority " of the economy, Ms Baillie said.
One of Scotland's leading entrepreneurs, Jim McColl, said earlier this year that he feared the Scottish Government may "half-cook" the proposed investment bank and fail to provide the kind of support which is available around the world.
Tory economy spokesman Dean Lockhart voiced concerns over the range of enterprise and economic bodies which now exist in Scotland, following concerns from the leading Fraser of Allander think tank over a "confusing" approach to policy.
Read more: Time is right for Scottish National Investment bank
"If the bank is to have any positive impact on Scotland's economy, the Scottish Government will need to take steps to streamline the cluttered landscape," he said.
The Scottish Government faced criticism last year when its much vaunted £500m Scottish Growth Scheme distributed less than £50million to firms. It is also not clear where the new investment bank will operate in relation to bodies like Scottish Enterprise and Highlands and Islands Enterprise.
An implementation plan for the bank was drawn up by Tesco Bank chief Benny Higgins.
Economy Secretary Keith Brown said the investment bank will be a "cornerstone of the economy" in Scotland.
He added: "It also has the potential to be truly transformative, operating under a core set of principles and missions, supporting sustainable growth and bringing benefits to individuals and communities across the country, making Scotland in the process a fairer and more prosperous country."