MSPs have sent out a strong signal about their anger over changes to the benefits system by refusing to back Westminster's Welfare Reform Bill.

It was the first time in 12 years that Holyrood has not passed a legislative consent motion granting Westminster the right to stray into the competence of the Scottish Parliament. It was also a rare occasion where SNP and Labour MSPs were united in voting together.

Iain Duncan Smith's welfare reforms will still go ahead south of the Border but last night's overwhelming vote means Holyrood will now have to enact its own primary legislation covering the Scottish end of the proposed reforms.

These cover "passport" issues where qualifying for a UK benefit triggers other non-DHSS entitlements, such as free school meals or disabled parking.

Anti-poverty campaigners praised the stance taken by MSPs, while the SNP and Labour rounded on Liberal Democrats for voting with the Tories – as in the Westminster Coalition.

Scottish Health Secretary Nicola Sturgeon, who had appealed for MSPs to take a stand, said: "This will be the first refusal of legislative consent in the lifetime of this Parliament. The fact it's not a blanket refusal shows that we don't take it lightly.

"But it is right that we in this Parliament stand up for the most vulnerable in our society."

She argued that Westminster should be able to legislate on areas of the Bill covering data-sharing, industrial injuries disablement benefit and the Social Mobility and Child Poverty Commission.

Ms Sturgeon, who is also Deputy First Minister, said she supports efforts to simplify the benefits system. But she added measures put forward by Mr Duncan Smith amount to cost-cutting.

Ms Sturgeon said: "We recognise the welfare system is broken and needs to be fixed, but we will not endorse proposals that seek to fix it at the expense of some of our most vulnerable people."

She said benefits receipts in Scotland would be reduced by £2.5 billion by 2015, with £1bn coming from disabled people and their families, adding: "Though these reforms are not of our making, the people of Scotland will be paying the price of them for a long time to come."

Her Labour shadow, Jackie Baillie, called the reforms the "most significant attack" on the welfare state in her lifetime.

But she said there were also challenges for the SNP administration, adding: "They have known about the UK Government's intentions with the Welfare Reform Bill for almost a year, yet even the most basic questions about what the Scottish Government will do have yet to be answered."

Scottish Tory health spokesman Jackson Carlaw said the SNP and Labour at Holyrood had brought forward a "hollow blank canvas of lurid rhetoric".

For the Liberal Democrats Liam McArthur said: "At best, it seems to be a gesture, but one with potentially serious consequences."

A Department for Work and Pensions spokeswoman said: "We are pleased the Scottish Government recognises the welfare system needs urgent reform so it's fair, simpler and that work always pays.

"These reforms will end the cycle of generations of Scots living a life on benefits whilst ensuring those people who need our help and support get it unconditionally."