A KEY public finance body last night denied backing borrowing powers for Holyrood, adding fresh fuel to the debate over the Forth crossing.

A KEY public finance body last night denied backing borrowing powers for Holyrood, adding fresh fuel to the debate over the Forth crossing.

The Scottish Government responded to the Chartered Institute of Public Finance (CIPFA) by citing comments made by the body in evidence to the Calman Commission into the devolution process.

The exchanges demonstrated the incendiary nature of the issue, with Westminster and Holyrood at odds over how to fund the project but no-one in any doubt that the crossing is vital.

CIPFA were cited by ministers on Sunday as part of a list of bodies supportive of the concept that the Scottish Government should have its own capital borrowing powers, but they issued a statement yesterday saying: "CIPFA has not published a statement, or agreed to endorse a statement, that supports this position on borrowing powers."

But an aide to John Swinney cited evidence given to a Calman hearing by Angela Scott of the institute where she said: "We must have different mechanisms of accountability, but the institute's preference is that having the power to tax and borrow brings a sense of accountability."

On the specific question of whether the Scottish Parliament should have borrowing powers, Ms Scott replied: "The Scottish Parliament might want to have such powers if the Scottish block were insufficient. When you look at the investment plans that are proposed over an extended period, you can see the case for seeking such powers."

The senior aide to the First Minister said yesterday that the planned meeting later this month in London between the Scottish Government and the Treasury would be about how the £2bn bridge is to be funded.

Scottish Secretary Jim Murphy, who will host the meeting, has suggested that the specifications of the bridge should be discussed. Mr Salmond's aide, however, made clear that an expert team had looked into these issues and reached the conclusion that the right approach was a scaled-down four-lane bridge - with the existing crossing retained and earmarked for public transport use only.

Meanwhile horse-trading continues ahead of Wednesday opening of the Budget Bill process. A government spokesman said yesterday: "We hope parliament will take the right decisions."