Tower Controller described a developing conflict between two VFR aircraft on top of one another conducting practice VOR-C approaches; the reporter electing to issue one aircraft a circling turn.

Narrative

While working the Local Control position; I observed two aircraft approaching on the VOR VFR practice approach. The two aircraft were on top of each other separated by about 400 FT. When the first aircraft (C172) checked in.9 I issued traffic; the pilot stated he was looking for traffic. Expecting the higher aircraft to begin descending; I instructed the C172 to make a right 360. The next aircraft a PA28 then checked in and I also issued traffic; to which the pilot responded 'looking.' In this case the higher aircraft was the PA28 with a low wing and the lower aircraft was a Cessna with a high wing. There was no way they would have been able to see each other. While the C172 was in the 360 the RADAR targets merged and were only about 300 FT apart vertical. I believe P50 TRACON tells practice approaches 'no separation services provided.' However; I think putting two aircraft on an approach right on top of each other is asking for an accident. Recommendation; P50 TRACON should provide separation to aircraft on practice approaches. I know as an IFR pilot myself while doing approaches your eyes are on the instruments and not always outside the cockpit. I don't know if traffic was ever issued by the TRACON to these aircraft but it would be good if P50 resolved any conflicts before giving a frequency change to the Tower.