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."
I can't. Imagining all the organisations who could disband if they decided they were unpopular enough.
band Party name suggestions on a postcard please.