DAVID Cameron has backed proposals to give the Scottish Parliament almost full control over income tax.

The Prime Minister endorsed recommendations put forward by the Strathclyde Commission on increasing the powers of the parliament, as the panel reported its findings yesterday.

He said he would "want to build consensus" around further devolution but insisted, if the Tories win next year's Westminster election, there was "no reason" why Holyrood should not gain more powers soon afterwards.

As expected, the long-awaited report from the Tory commission had further devolution of income tax at its heart.

The panel, which was headed by Lord Tom Strathclyde, the former Tory leader in the Lords, and included senior politicians, business leaders and legal experts, also said there was "a strong case" for handing Holyrood control over housing benefit and attendance allowance, which is paid to people who require a carer.

It concluded National Insurance and state pensions, the vast bulk of the welfare system and corporation tax, the main tax on business profits, should remain the responsibility of the UK Government.

Among a number of reforms to Holyrood, the commission said some parliament committees should be chaired only by opposition MSPs in an attempt to improve scrutiny of the Government.

Deputy First Minister Nicola Sturgeon claimed the Tory tax plans "made the case for independence" but said only a Yes vote in September's referendum would guarantee greater powers for the Scottish Parliament.

But backing the plans, Mr Cameron said they amounted to a "clear, coherent and Conservative blueprint for the next stage of Scotland's devolution journey".

He said he wanted to see the policies implemented quickly, adding: "All the mainstream pro-UK parties believe in further devolution, so whilst we would want to build consensus for a set of measures and legislation, there is no reason why these changes should not happen early in the next Parliament.

"We want to make the Scottish Parliament more responsible for the money it spends - these are real powers with real consequences."

Under the Conservatives' plans, Holyrood would become responsible for setting income tax rates and bands in Scotland.

The UK Government would continue to set the personal allowance, the threshold at which income becomes taxable.

Holyrood would also only raise income tax on "earned income," with tax on income from shares, investments and savings continuing to go to the UK Treasury.

The report said it was "unfortunate" that VAT could not be devolved to Scotland under EU law but called for a share of revenues from the sales tax - about half - should be handed directly to the Scottish Government.

A recommendation to hand Holyrood control over Air Passenger Duty, the tax on flights, had not been agreed by the UK Government, Ms Davidson said.

To consider further devolution beyond the recommendation contained in yesterday's report, the commission called for a "committee of all the parliaments and assemblies of the UK" to be established.

The Tory proposals will be included in the party's 2015 Westminster election manifesto and, if implemented in full, would make Holyrood responsible for raising just over half of the £35billion it spends annually.

The tax proposals do not go as far as plans outlined by the LibDems, who also want inheritance tax and capital gains tax transferred to Holyrood.

However they go further than Labour's blueprint for future devolution. Johann Lamont's party has promised to give the Scottish Parliament powers to raise but not cut the higher income tax bands.

Ruth Davidson, the Scots Tory leader, said she backed the commission's findings in full.

She said: "I have spoken directly to the Prime Minister and the Chancellor and there is political will for this to happen.

"If we win the 2015 General Election, or are the largest party, these are the proposals we are taking to the Commons. This is going in our 2015 manifesto."

Ms Sturgeon said: "There now appears to be a consensus among all parties - even the Conservatives - for more powers for Scotland, but a Yes vote in September is the only way to guarantee those powers are delivered.

"The debate is no longer about whether Scotland needs more powers - it is now about the extent of those powers, and how we can best guarantee them."