Scotland deserves better than the “back and forth blame game” over Holyrood’s new tax powers, Labour says today as the ninth intergovernmental meeting takes place in Edinburgh to break the deadlock.

Ian Murray, the Shadow Scottish Secretary, in a letter to the two main negotiators – John Swinney for the Scottish Government and Greg Hands for the UK Government, calls for transparency and urges both of them to lay out the principles for their negotiation regarding the nub of the impasse – how to reduce the annual £30 billion block grant as new tax powers are introduced.

“These negotiations are too important to be happening behind closed doors with no explanation of what is guiding each party,” declares Mr Murray.

“People across Scotland deserve better than this back and forth blame game. They deserve answers and need to understand the issues at stake. I would be grateful if you could consider this ahead of today’s meeting and, at the very least, provide a more complete account of the meeting,” he adds.

The Edinburgh MP’s appeal came after David Mundell made clear the UK Government would “not walk away” from the tax powers talks.

The Scottish Secretary stressed how it had been seeking to address one of the SNP Government’s main sticking points; that is, the fact that the Scottish population is not forecast to rise as strongly as the UK’s, which would have implications for revenue in the years ahead.

Emphasising how the Treasury had “moved” to get a compromise deal, Mr Mundell declared: "We will not walk away, we will stay until a deal is done. It takes two to reach a deal but we're not walking away.”

He added: “I know the people of Scotland want to see the Scottish Parliament have extensive powers over tax and welfare,(to) become that powerhouse parliament."

But Stewart Hosie, the SNP’s deputy leader, while saying he hope agreement could be reached, warned there was a “considerable distance still to go” and that Whitehall was proposing reductions of up to £7bn over 10 years, which were unacceptable would be detrimental to Scotland.

“The UK Government want to embed systemic cuts into Scotland's funding,” he declared.

The Dundee MP added: "The overall level of the block grant, which makes up the bulk of Scotland's funding, is still supposed to be delivered by Barnett. That is agreed by all parties and we cannot have Unionist politicians in the UK Government seeking to undermine that and cut Scotland's block grant in a systemic way, way above anything any devolved tax could compensate for. That's wrong, it's unfair and it breaches the spirit of all the negotiations."

Mr Swinney favours a “per capita index deduction” method, which he believes will secure future funding even if, as predicted, the UK’s population grows much faster than Scotland’s.

Mr Hands believes a “levels deduction” is best as the UK Government makes clear that UK taxpayers should not have to fund Scottish public services more just because Scotland’s population is not growing as fast as the UK’s. But Holyrood believes this option could leave Scotland £7bn out of pocket over 10 years.

Another option, indexed deduction, is believed to be being pushed by the UK Government as a compromise but Mr Swinney believes this will cut Scotland’s revenue by £3.5bn over the next decade and so is unacceptable.

He announced today that he would publish all the key documents relating to the talks ahead of the dissolution of the Scottish Parliament; a sign seen by some as preparing the ground for the talks to collapse. If they did it would lead to recrimination and rancour between Edinburgh and London.

“People have a right to expect open and transparent government and will be able to see and judge for themselves the issues at stake,” said the DFM Meantime, the Commons Scottish Affairs Committee has announced it is launching an inquiry into Scotland’s population and the implications for devolution.

Pete Wishart, its chairman, said MPs would be asking “how demographic differences between Scotland and the rest of the United Kingdom are accounted for in national policy. One only has to look at the ongoing negotiations over the fiscal framework and the question of whether Scotland should bear the economic risk of slower population growth to see the relevance of our inquiry.”