There is nothing new about the idea of federalism in Britain.

Early in the 20th century, a Cabinet sub-committee was tasked with drafting a Bill for a federal UK, in an attempt to deal with the Irish question. Federalism has long been a Liberal, then Liberal Democrat, objective.

In recent months the idea has attracted more interest, as a possible way forward should Scotland vote No in September's independence referendum.

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At its core, federalism is the belief that sovereignty is entrenched at each layer of government, as opposed to the current UK constitutional position whereby all sovereignty rests with Westminster. Whilst we do have devolution to Scotland, Wales and Northern Ireland, these devolved institutions derive their authority from Westminster and, technically, could be abolished at any point by an act of the Westminster parliament. As Enoch Powell famously stated: "Power devolved is power retained."

The Scottish Parliament operates more or less along the lines of a state legislator in many federal systems, the significant difference being the lack of tax-varying powers (to an extent, but only that, this will be rectified when the tax-varying powers in the Scotland Act come fully into force in 2015).

To create a federal system for Scotland, Wales and Northern Ireland would be comparatively straightforward. It would involve entrenching in a written constitution the existence, and sovereignty, of these institutions, moving some way to equalising their powers, and providing greater financial responsibility (as proposed by the Scottish Conservatives' Strathclyde Commission).

The greatest challenge for UK federalists is what to do about England. The question of how England should be governed is a matter for the English people themselves, and there already exists a campaign for an English Parliament. Beyond that there is a vigorous lobby to deal with the West Lothian question, to which a satisfactory answer is still awaited.

It is perfectly possible in theory to create an English Parliament with powers akin to Holyrood, either as a stand-alone institution or simply by taking the existing members of the House of Commons who sit for English constituencies and constituting them into a de facto English Parliament sitting on certain days of the week. A new executive would have to be formed, with an English first minister and cabinet, exercising devolved powers.

Alternatively, and preferably, a way could be found to devolve powers within England: to cities, city regions and historic counties like Yorkshire and Cornwall. Ironically, here the capital has been leading the way, with the elected Mayor of London, Boris Johnson, calling for more powers, including over legislation, for the city. Last week the Chancellor, George Osborne, promised more local decision-making and control of budgets for northern cities.

The beauty of federalism within the UK, if it were workable and could be achieved, is a solution which could unite both unionists and many nationalists, and provide a secure framework for the future. It would help deal with other thorny, and potentially irresolvable, constitutional problems: the West Lothian question and reform of the House of Lords, with the latter being replaced with an elected senate with equal representation from the constituent parts of the UK.

There are clear attractions in a federal model for unionists, as a way of providing stability and balance to a currently unstable and unbalanced set of arrangements. For nationalists, whilst federalism clearly secures Scotland's place in the UK, it nevertheless entrenches in law the existence of the Scottish Parliament and, of course, involves the devolution of substantial additional financial powers.

The SNP reaction to a speech on federalism I made last week was interesting in that it did not oppose the idea in principle (for, clearly, some nationalists will be attracted to it). Instead, UK federalism was dismissed because it would never happen; it was "pie in the sky".

It is a pity those in the Yes camp are so negative. These are the same people who, of course, dismissed in similar terms the notion of a devolved Scottish Parliament, claiming it would never be delivered; and the Calman Commission proposals, now extensively implemented in the Scotland Act 2012. And they cannot get away from the growing signs of interest in a federal model, even within England.

Scotland is a deeply divided country when it comes to our constitutional future, A referendum with a binary Yes/No question was always going to polarise opinion. After a No vote in September, all of us - unionist and nationalist - need to find a way to move forward together. Federalism has the potential to be the common ground on which we can unite a divided nation.