SNP plans for control of tax and spending under fire as big drop in North Sea tax revenues predicted

The figure was £34.5billion lower than the OBR's long term forecast last year and reflected the slump in oil prices and falling production.

It came as the SNP published an amendment to the Scotland Bill that would give Holyrood the power to implement full fiscal autonomy at a time of the Scottish Government's choosing.

Under the "devo max" set-up, the Scottish Government would become responsible for all taxes and public spending in Scotland.

Scotland's grant from Westminster would end and Holyrood would make an annual contribution to the UK Government for remaining shared services including defence and foreign policy.

The SNP has been accused of back-tracking from the policy since the Institute for Fiscal Studies think tank  warned earlier this year the arrangement would leave Scotland £7.6billion worse off than under the present arrangements.

The black hole would grow to nearly £10billion by 2020, the IFS said.

Scottish Labour produced new figures showing oil would have to reach a record price of 200 dollars per barrel for an fiscally autonomous Scotland to balance the books.

Speaking at First Minister's Questions she accused John Swinney, the Deputy First Minister who was standing in for Nicola Sturgeon, of "trying to punt us something he knows to be dodgy".

She told him: "For the sake of Scotland's schools and hospitals shouldn't the SNP just abandon this disastrous plan for full fiscal autonomy?"

Mr Swinney defended the plan, telling MSPs: "What full fiscal autonomy is about is about building on the powers of this parliament, powers that over the last 16 years have seen an improvement in the economic performance of Scotland.

"The moral of the story is where we can exercise distinctive economic policies in Scotland, we can transform the economic performance of this country, and for me that is what fiscal autonomy is all about."

The OBR said lower oil prices would wipe £15billion off oil revenues between 2020 and 2040 and falling production would reduce tax take by a further £13billion.

The Scottish Government talked down the impact of falling oil revenues.

The First Minister's official spokesman said: "Oil prices fluctuate, the price has recently gone back up quite significantly.

"But the Scottish economy is about much more than oil and gas."

He insisted the possible  introduction of full fiscal autonomy was not linked to oil prices.

The price of oil crashed from 115 dollars per barrel a year ago to 45 dollars per barrel in January. It has since recovered to around 65 dollars per barrel.

The IFS calculated that borrowing in Scotland is equivalent to 8.6 per cent of national income this year, compared with four per cent across the UK as a whole.

The difference in cash terms is £7.6billion.

The figure shows the amount of extra cash a fiscally autonomous Scotland would have to find to maintain spending while keeping the deficit to its present level.

In an updated assessment yesterday, IFS economist Gemma Tetlow said: "Full fiscal autonomy would give the Scottish Government control over what and how to tax and what and how to spend.

"But it is generally assumed that it would also lead to them losing any net transfer from the rest of the UK.

"If this were the case, the higher deficit they would likely face would require them to find even bigger tax increases or spending cuts than those currently planned for the UK as a whole, to avoid their debt rising rapidly."

She said full fiscal autonomy "might or might not" lead to policies which boosted the economy in the long run but added: "The consequences of the short run arithmetic are not easily avoided." 

Labour's shadow Scottish secretary Ian Murray called on the SNP to back his amendment to the Scotland Bill which would set up an independent inquiry into the consequences of full fiscal autonomy.