By Andy Bruce and Guy Faulconbridge
DUNDEE, Scotland (Reuters) - Among the social housing estates of Scotland's fourth largest city, Ed Miliband's bid to unseat Prime Minister David Cameron is in trouble: His opposition Labour party is hemorrhaging support to nationalists.
Though Scots voted to stay part of the United Kingdom in a Sept. 18 referendum, support for the Scottish National Party has since soared amid mistrust the London government won't deliver to Scotland's parliament the extra powers it promised to swing the poll result.
Capitalizing on that, the nationalists now aim to turn defeat into victory by usurping Labour in Scotland and winning the ultimate triumph -- the balance of power in a fractured Westminster after Britain's May 7 national election.
The battle for Scotland comes down to just Labour and the SNP; Cameron's Conservatives currently hold only one seat while Labour won 41 out of 59 seats at the 2010 election. Polls now indicate the SNP could take most of Labour's seats, tearing up the pattern of the last 50 years to become Britain's third largest party by lawmakers in what is likely to be the closest general election for a generation.
Labour's unpopularity is not just linked to a resurgence of nationalism, however. Former supporters say they have been put off by an impression the party is increasingly right-wing and London-based, cosy with bankers and city slickers where once it spoke to the working class across the United Kingdom.
"My mother and father were both card-carrying members of the Labour party, socialists to their bones," Morag Lennie, a 70-year-old SNP supporter and retired social care manager, told Reuters in Dundee.
"I'm glad they're dead because it would break their hearts to see (Labour's) besuited career politicians who haven't got the first clue what most people are struggling with," she said.
'RED TORIES'?
To pull off the promised rout of Labour, SNP leader Nicola Sturgeon must turn seats such as Dundee West which is nestled on the estuary of the River Tay on Scotland's North Sea coast.
Dundee grew rich in the 19th Century by using whale oil to turn Indian jute into sacks for British imperial trade in everything from coffee to cotton. But its mighty shipyards are now closed, and the city has Scotland's lowest employment rate.
Besides economic decline, Dundee tells another story: How the SNP has been stalking the Labour party over four decades.
The SNP held Dundee East, one of the city's two Westminster seats, between 1974 and 1987. In 2003 it won one of the city's Scottish parliamentary seats. In 2005 it recaptured the Dundee East Westminster seat and kept it in 2010. In 2007 and 2010, it won the most local council seats in Dundee.
Now it is gunning for Labour's 7,000 majority in the other Westminster seat, Dundee West, Labour's since 1950.
Labour's main defense is its new Scottish leader Jim Murphy -- parachuted in after former leader Johann Lamont quit, accusing the party of trying to run Scotland "like a branch office of London."
As Murphy visited Dundee's Ardler social housing estate this month, one man screamed "Red Tories" from a car as it sped past, a reference to Labour's support for the union with England in the referendum. Later, SNP activists shouted he was a 'traitor'.
The 47-year-old, who was raised on a council estate in Glasgow, was calm about the insults. Against a backdrop of Scottish flags and blue 'Yes' to independence stickers in many windows on the housing scheme, he insisted Labour would hold all its Scottish seats.
"The polls are there to be confounded. The Labour party is behind in the polls. Of course we are behind," said Murphy. "But I am determined to win because coming second is coming last. And I have no intention of coming last."
He will have to persuade the likes of Jacqueline Kerr, 45, who lives on the Dundee estate and believes Labour has turned away from its traditional supporters.
"I am not a member of SNP; I am a member of my class. I am not a member of any political parties but I want independence and I am totally against the Red Tories," she said.
'MR IRN-BRU'
Murphy rose to national prominence in 2013 when he helped injured people at the scene of a shocking helicopter crash onto a Glasgow pub. During the referendum campaign, he toured 100 towns to give an impassioned defense of the union while standing on an upturned crate of Irn-Bru - the bright orange beverage known as Scotland's other national drink after whisky.
Campaign chief for the failed attempt by Ed Miliband's brother David to win the Labour leadership, Murphy must rebuild Scottish Labour for Ed by both outmaneuvering the SNP's attack on its leftist principles and striking a nationalist chord.
In the words of John Curtice, professor of politics at the University of Strathclyde, the SNP's bid for the mantle of social justice in Scotland means Murphy has to "win over voters who perceive themselves as being to the left of his party, and.. certainly as being more Scottish than the [Labour] party."
While some Scottish voters traditionally used their SNP vote for local elections and saved Labour for their general election vote, SNP activists say that is changing as their party looks increasingly like a candidate for the British political stage.
If the SNP wins the balance of power in Westminster, it is certain to demand more powers for Scotland -- overturning Prime Minister David Cameron's assertion that September's referendum result had settled the issue of independence for a generation.
The SNP has already laid out one condition for propping up a possible Labour minority government: scrapping Britain's plans to base a new generation of nuclear-armed submarines on the River Clyde, just 25 miles (40 km) west of Glasgow.
According to Steven Paterson, the SNP's Westminster candidate for Stirling: "The evidence I've got from speaking to people, knocking on doors...(the referendum) has changed things. It's a huge opportunity to make gains."
The SNP is currently polling at over 50 percent of the vote in Scotland against Labour's 25 percent. The Conservatives are on 13 percent and Liberals on 4 percent, suggesting that all but a handful of Labour seats would fall to the SNP.
To win across the board, the SNP would have to overturn some vast Labour majorities of over 15,000 votes in places such as Glasgow, Scotland's biggest city, which sent 7 Labour lawmakers to Westminster in the last general election but voted for independence in last year's referendum.
A former Labour voter in Glasgow, 50-year-old Donnie Campbell says that this time around he will vote SNP.
"I voted Labour last time, but I voted Yes in the referendum," he said. "Labour are unelectable. I'd go back... but only when they're a credible alternative."