Gordon Brown has signalled that the Scottish parliament could be given more tax-raising powers, flatly contradicting statements made by one of his ministers last week.
In a BBC Scotland interview broadcast today, the prime minister said that there is a case for reviewing the devolution settlement and in particular the financial arrangements.
Last week, David Cairns, the Scotland Office minister, brushed aside talk of substantial new powers for Holyrood as an inward-looking issue for the "McChattering classes".
In an interview with our sister paper, The Herald, Cairns said that Labour should be concentrating on how best to deliver core services and on creating a superior vision for Scotland's future against those of the SNP, Conservatives and the Liberal Democrats.
However, today the prime minister said: "There is an issue about the financial responsibility of an executive or an administration that has £30 billion to spend but doesn't have any responsibility for raising that."
Asked about the possibility of more tax powers emerging from this review, Brown said: "Well, this is what any review should look at. Nobody should pre-judge it.
"There is a case for saying that in any other devolved administration in the world there is usually a financial responsibility that requires not only the spending of money by the administration but also its responsibility to take seriously how it raises money."
And the prime minister said: "Now the question is, just as local government has to raise some of its money through council tax, just as many other areas in the world where there are devolved administrations have to raise money through assigned taxation, is there a case for doing so by Holyrood? So that's one of the things that could be looked at." Brown also mounted a strong public defence of Scottish Labour's leader, Wendy Alexander, and her plans for a Constitutional Commission to revisit the devolution settlement. "I think there is a very strong case for moving forward with this review, a strong case for looking, after 10 years of devolution, at what is the right step forward," Brown said in the interview. A number of Labour MPs are thought to be particularly unhappy at this idea, arguing that to open up a new debate about the powers of the Scottish parliament can only help the SNP. Brown defended the plan for what Alexander has described as a "commission" - although he calls it a "review" - and points out that the move has been taken on board by a vote in the Scottish Parliament. The SNP government immediately seized upon Brown's words, saying his acceptance that change is needed was "in stark contrast to the no change' position in which he fought last year's Scottish election campaign". A source close to Alex Salmond said: "Gordon Brown uses the word review' of the current arrangements no fewer than four times, which clearly confirms the reports that Wendy Alexander's proposed commission has been strangled at birth by Downing Street. "We can assume the commission is dead in the water, replaced by a Downing Street review or working party. "Nevertheless, the prime minister's acceptance that change is necessary stands in stark contrast to the no change' position in which he fought last year's Scottish election campaign. "However, the only acceptable move on finance will be one to full fiscal autonomy, anything else will open the clear danger that a Downing Street review is about cutting Scottish public spending even at the moment where burgeoning Scottish resources are the one revenue item keeping the UK Treasury afloat. "The unionist parties in Scotland should be on their guard. They may be walking into a Downing Street trap. "The Scottish government will pursue our national conversation, confident that the future will be shaped in Scotland, not Downing Street."