MPs representing Scottish constituencies would be stripped of the power to "impose" income tax rate changes on the rest of the UK under a parliamentary shake-up being put forward by the Conservatives.

Commons leader William Hague will announce that his party has plumped for the least radical of three options put forward to resolve demands for "English votes for English laws".

It would give an effective veto to MPs for seats in England - and Wales on some policies - over matters that are decided north of the border by the Scottish Parliament, but would still require a majority of all UK MPs to pass legislation.

By rejecting a more far-reaching solution, Mr Hague risks a backlash from Tory backbenchers angry over the scale of extra powers that were promised to Holyrood to persuade Scots to reject independence in September's referendum.

But they will be delighted at confirmation that financial matters would be included, raising the potential for serious difficulties for any future Labour government reliant on its own Scottish MPs - or the support of the SNP - for a Commons majority.

Critics say the move would contradict the cross-party Smith Commission which drew up new powers for Holyrood following the "No" vote and recommended MPs across the UK "will continue to decide the UK's Budget, including Income Tax".

Mr Hague though - who hopes to see the reforms debated in the Commons before the general election - will argue that it is a "fundamental issue of fairness".

"How could it possibly be right for the Scottish Parliament, for example, to vote for a reduction in Air Passenger Duty in Scotland and then for Scottish MPs to come to Westminster and be able to impose an increase in Air Passenger Duty in England?

"You only have to think about this for a moment to see how fundamentally important this is and how such issues have to be addressed. Under our proposal this would not be possible without the agreement of English MPs.

"The English veto should be extended to taxation when the equivalent decisions have been devolved to Scotland - and under a Conservative Government it will be."

Under the preferred option, only English MPs would consider the amending stages of legislation that relates only to England and have a veto via a procedure known as a legislative consent motion.

Welsh MPs would be included on matters not devolved to the Cardiff Assembly.

The resulting legislation would though still require the final endorsement of all MPs, and some Conservative MPs believe only the more radical option of giving them no vote at all on the matter would meet promises made by David Cameron.

The Prime Minister directly linked the English votes issue - the long-unresolved "West Lothian question" - to the granting of new powers to Holyrood in his immediate response to the rejection of independence by the electorate in Scotland.

He said a "decisive answer" should be drawn up "to the same timetable" as enhanced devolution but attempts at cross-party talks were boycotted by Labour as a "stitch up".

Mr Hague will say retaining a final - Third Reading - vote "gives an effective veto to English MPs over matters only affecting England, or England and Wales, while maintaining the integrity of the United Kingdom Parliament.

"Both of these objectives are crucial, and both can be fulfilled by our chosen way forward.

"This would mean that all Members of Parliament would continue to vote on every aspect of the UK budget: it would continue to be considered as now, including in a Finance Bill Committee.

"There would be no issue with the Chancellor of the Exchequer representing a Scottish constituency. But where taxes have been devolved to Scotland the equivalent taxes in England would require the consent of English MPs.

"MPs from all parts of the UK will continue to be able to deliberate and vote together, but on both the details and principle of legislation and other decisions concerning only England, they will have to respect the decisive say of MPs representing English constituencies.

"Some people will argue that this will weaken the United Kingdom, but I say that failure to act would be the true weakening of the United Kingdom," Mr Hague will insist.

A Downing Street source acknowledged there were "clearly different views" within the party but expected "very widespread support" for the chosen option.

Draft legislation was published last month which would give MSPs control of income tax rates and bands for the first time, with cash raised from the levy north of the border staying in Scotland.

Powers over air passenger duty (APD) are also to be devolved

Chancellor George Osborne has told MPs that whoever is in Number 11 after the general election should not be "beholden on Scottish nationalist votes".

Once powers to set income tax have been devolved, Scotland would have to "live with the consequences" of its decisions - including if wealthy individuals flee across the border to escape "punitive" rates, he said.

Mr Hague said the proposals will feature in the Conservative manifesto for the May 7 general election and be "a very high priority" for Tories if they win an outright majority.

He told BBC1's Breakfast: "In an ideal world, I would like to see this passed before the coming election so it was ready for whatever the result of the election is.

"The other parties don't support this proposal - the Liberal Democrats have a different proposal of their own, the Labour Party don't want to talk about it at all - so it is unlikely we would be able to pass any such thing before the election.

"But this will be in the manifesto of the Conservative Party at the next general election and a Conservative government would have as a very high priority bringing in these rules."

Explaining how his proposals would work in detail, Mr Hague said: "Before a Bill or parts of a Bill affecting only England was put to its final vote in the House of Commons, the English MPs would meet separately in what would be called the English Grand Committee and decide whether they agreed on it or not and it couldn't proceed unless they said they did agree.

"In addition, the committee stage of considering legislation, where all the detailed work is done and amendments are moved, would also consist only of the English MPs.

"That would really give English control over what is passed, but it would keep the United Kingdom Parliament together at the same time.

"MPs from all parts of the UK would continue to debate, as they do now, anything they want. It is just that they would only be able to pass measures relating only to England with the agreement of the English MPs."

Mr Hague said it would probably be for the Speaker of the Commons to decide which measures should be treated as England-only.

"There would have to be a mechanism for deciding what is an English matter," he said.

"Most of the recommendations from all the studies have said you would have to ask the Speaker of the House of Commons or some other impartial authority to certify when a piece of legislation or part of it is English or English and Welsh or United Kingdom. That's the system we would have to adopt."

Next week's vote on financial settlements for English councils was an example of the kind of matter over which English MPs would be granted a veto, he suggested.

Mr Hague acknowledged that the proposals could still mean MPs from Scotland voting on matters which do not relate to their constituents but insisted that English MPs would have the "decisive" say.

Asked whether former SNP leader Alex Salmond, who hopes to win a Westminster seat in May, would be able to vote on English legislation, Mr Hague said: "He will be voting on it but the decisive votes will be cast by the English Members of Parliament."

The proposals fall short of the English parliament demanded by MPs including Tory former Cabinet minister John Redwood, but Mr Hague insisted they were a "fair" solution.

He told BBC Radio 5 Live: "Before a law could be put to the final vote - the third reading in the House of Commons - it would have to pass through a vote of the English MPs only and if it didn't pass that vote then it couldn't be passed into law at all, so then there would be an English veto.

"Now, that's not the same as setting up an English parliament or some kind of independence for England. This is about keeping the UK together as well as being fair to England. It will be a great deal fairer for England than the current arrangements."

Mr Hague acknowledged the proposed changes would curtail the ability of a future government which relied on the votes of Scottish MPs for its overall majority at Westminster to legislate on England-only matters such as health, education and transport.

"It would be able to get many things through that are United Kingdom matters, but when it came to England then it would have to have regard to the majority in England. That is a necessary corollary of greater devolution to Scotland and Wales," he told the BBC Radio 4 Today programme.

"If we don't address this you could have a Scottish parliament setting a lower rate of income tax in Scotland and then Scottish MPs coming to Westminster and voting for a higher rate of income tax in England. Imagine how damaging that would be."

Shadow communities secretary Hilary Benn said: "Labour will take forward the McKay proposal of an English or English and Welsh only committee stage.

"Done in the right way, we believe this is a sensible reform. Labour's people-led Constitutional Convention will consider this as part of a wider package of reforms after May's general election.

"But there's no hiding the fact that what William Hague has come forward with today is not what his backbenchers were expecting.

"David Cameron has played fast and loose with the future of the United Kingdom ever since his speech just minutes after the referendum result.

"As the party of the Union, only Labour will devolve real power and resources from Whitehall to all parts of England and only a Labour government will be in a position to deliver the change we need for the whole of the United Kingdom."

The chairman of the House of Commons Political and Constitutional Reform Committee, Labour MP Graham Allen, said the debate about devolution in England had been "hijacked" by wrangling about English votes for English laws.

Mr Allen said: "Devolution for England is not getting a fair hearing, having been hijacked by the wrangle over parliamentary procedures on a handful of England-only laws. The exciting debates being held in Scotland, Wales and Northern Ireland are being denied to England.

"Deciding how independent local government can be the vehicle for English devolution, how England can break free of massively over-centralised Whitehall control, how Scottish-style income tax retention could liberate English localities are just a few of the issues being pushed off the agenda for an esoteric Westminster issue.

"After Scotland's referendum, party leaders had a unique chance to remake a settled and long-lasting new Union made up of devolved nations. So far, they have failed to live up to the historic opportunity."

The Electoral Reform Society (ERS) called for the establishment of a citizen's convention to settle the UK's constitutional future.

ERS deputy chief executive Darren Hughes warned that "English votes for English laws" cannot be isolated as an issue from wider constitutional questions and that Mr Hague's proposal would have "huge implications for the way we are governed".

"A citizen-led convention would put people, not politicians, in the driving seat when it comes to settling our constitutional future," said Mr Hughes.

"It's the only way to answer these difficult questions and come to a settlement that commands legitimacy and respect.

"It's time to put an end to these back-room deals and unilateral announcements, whether it's the Conservatives in England or Labour in Scotland.

"Let's give citizens a chance to decide where power should lie in the UK."

Stewart Hosie MP, SNP Depute leader  and Treasury spokesperson, said : "It is ridiculous that the Tories continue to push the shambolic and confused plan to stop Scottish MPs voting on parts of the entire UK budget. It is even more confusing that they are using the incomplete devolution of Income Tax rates and bands as a smokescreen by William Hague and his colleagues

''It strikes me that the Unionist parties are more interested by their own agenda of English Votes for English Laws, that they are for meaningful devolution for Scotland. 

"Until Income Tax - for example - is devolved in full, it is illogical and wrong for anyone to carve Scottish MPs out of important decision making 

"Paradoxically William Hague has actually made the case today for full fiscal devolution -  where Scotland takes full responsibility for growing the economy, and not this half way house which offers minimal economic powers while resulting in a loss of voting rights."