Shadow Chancellor Ed Balls has insisted Labour is not considering an election deal with the SNP as he appeared to reject Nicola Sturgeon's offer of votes at Westminster.

 

His comments came as a poll of polls suggested that Labour would become the largest party at Westminster in May but without an overall majority.

The forecast also predicted the SNP would take 53 out of 59 seats north of the border.

Scottish Labour sources denied panic had set in as they predicted the final tally would be "nowhere near as bad" as polls suggest.

The SNP reiterated Mrs Sturgeons's offer to back Labour plans to repeal Tory changes to the NHS in England, which the First MInister argues will have knock-on effects in Scotland.

The war of words between the parties came as David Cameron announced the Conservatives would cut the benefits cap for workless households to £23,000 in their first act in government and confirmed he would end housing benefit for 18 to 21-year-olds.

Lib Dem leader Nick Clegg also warned the Tory leader would introduce 'regional pay' in the public sector if the Conservatives win in May.

Asked if Labour was considering a deal with the SNP, Mr Balls said: "No".

He added: "I don't think anybody is suggesting any suggestion of a deal with the SNP at all, we're fighting hard for a majority."

On the NHS, he added: "If you want to have Labour's plan to save the NHS, you've got to vote Labour."

In a separate move the deputy general secretary of the Labour-linked think tank the Fabian Society, Marcus Roberts. predicted a Labour-SNP alliance would "kill off Labour in Scotland" within five or ten years.

The poll of polls suggested a hung parliament, with Labour on 286 seats, the Tories 265, SNP 53,Lib Dems 20 and UKIP 2.

Privately SNP sources downplay suggestions they could take all but a handful of seats in Scotland.

Last night Scottish Labour sources insisted they were not panicking.

One said: "My experience on the doorstep is that the situation is nowhere near as bad as the polls suggest."

Asked if panic was setting in, he added: "No....I am quietly confident we will do well and I don't expect a final result resembling any polls that suggest we will only have four, five or 10 seats in Scotland."

Some senior Labour MPs are urging Ed Miliband to rule out any alliance with the SNP.

But others argue such a deal could work in Labour's favour.

Under a so-called "confidence and supply" arrangement the SNP could oppose the government on most votes.

Some Labour MPs believe that could open the SNP up to the charge of 'siding with the Tories' at Westminster.

The Conservatives have tried to pressure Labour over the SNP, with David Cameron calling the prospect "genuinely frightening".

A separate poll showed nearly half of Scots think the UK should scrap nuclear weapons, compared to only a quarter of those across the UK as a whole.

The SNP have made the abolition of Trident a key demand in any negotiations with Labour.

A third poll showed most voters would prefer Mr Cameron over Mr Miliband as Prime Minister, by 55 per cent to 45 per cent.

Mr Cameron said he was "worried" by the idea of a Labour government, suggesting it could be "an unstable left-wing government that starts to borrow and spend".

Mr Miliband warned the NHS was in 'peril' under the Tories as he announced a pledge to make it exempt from a controversial US trade deal which campaigners warn will lead to creeping privatisation.

But an internal row broke out within Labour as former health secretary Alan Milburn warned against criticising private provision in the NHS.

Tory MPs were also warned that their party may never again form a majority government if Mr Cameron fails to win a majority in May, by former cabinet minister John Redwood.

A separate report by psephologist Lewis Baston for political consultants Westbourne Communications predicted Labour would take 302 seats, the Conservatives 269, the Liberal Democrats 31, the SNP 21 and Ukip 5.