Michael Forsyth, the former Tory minister, has emerged as a key figure behind plans to erect Scotland’s first statue commemorating the economist Adam Smith.

The Conservative peer and former Scottish secretary is one of several Scots who have each invested £5,000 to erect a 20ft statue of the “father of economics” outside St Giles Cathedral on Edinburgh’s Royal Mile.

The involvement of such a high-profile Tory figure in the project will embarrass Gordon Brown, who is an admirer of the 18th-century thinker and who was raised in Smith’s home town of Kirkcaldy.

Despite Smith being feted by entrepreneurs and economists including Bill Gates, the Microsoft tycoon, and Mervyn King, the governor of the Bank of England, the statue, due to be unveiled next month, will be the first monument to the internationally acclaimed Scots economist in his home country.

Smith, who was one of the most influential figures in the Scottish Enlightenment, has been vaunted as one of the first exponents of free market economics, making him something of a hate figure among the political left.

Forsyth and other prominent figures including Brian Souter, the Stagecoach tycoon, and David Murray, the Rangers chairman, felt it was unacceptable that Scotland did not have a statue commemorating one of its most famous sons.

“It is absolutely amazing that there is not already a statue of Adam Smith. It just tells you something. It absolutely sums up the sort of ‘Ah kent his faither’ attitude of some Scots, that this was the father of economics, a hugely important man, and we haven’t given him a statue,” said Forsyth.

Dr Eamonn Butler, director of the Adam Smith Institute, which is co-ordinating the project, said he hoped that the tribute would be welcomed by people on both sides of the political divide.

Butler said he believed that Smith’s support for laissez-faire capitalism had been overstated and that his vision, explored in An Inquiry into the Nature and Causes of the Wealth of Nations, had to do with lifting the poorest people out of deprivation.

“It is extraordinary that Adam Smith has been overlooked without a statue for so long. I would hate to believe it was anything to do with left-wing politics in Scotland,” he said.

“Adam Smith was a supporter of the free market because he thought the free market was the best way to help the poorest people. He wasn’t in it for the boss class. If you read his works, the humanity of the man comes out of every line — it wasn’t capitalism red in tooth and claw stuff.”

Nevertheless, Butler said he believed Smith would have been horrified by the policies of the Brown government.

“If Smith came back today he would regard a government that taxed 40% of our income to run schools and hospitals and pensions, railways and roads and so on as the greatest tyranny,” he said.

The £250,000 tribute has been created by Sandy Stoddart, the acclaimed Scots sculptor, who has been finishing the piece at a foundry in Essex.

Visitors to the statue will be encouraged to continue to the foot of the Royal Mile to visit Smith’s tomb in the Canongate kirkyard. He spent the last 12 years of his life in Edinburgh.

Times Recommends

• An officer and a gentle woman
• Dame Helen Mirren is worthy of the Epidaurus
• Foods that can help to prevent swine flu