LABOUR will take a positive, open-minded approach to the Smith Commission process but will not agree to Scotland's representation at Westminster being diluted in any way.

The crunch point as the cross-party talks get under way in earnest on Thursday in Edinburgh remains how much income tax powers should be transferred from London to Edinburgh.

While the Conservatives and Liberal Democrats propose virtually all of them should come north, Labour appears divided.

Today, writing in The Herald, Lord Smith of Kelvin acknowledges there is "substantial distance" between the respective parties' proposals but points out that for progress to be made there needs to be compromise.

The Crossbench peer stresses that not only politicians but also civic Scotland and the public have to be engaged and that a special session of the cross-party talks to discuss the latter will be held next month.

But Lord Smith makes clear the deadline of St Andrew's Day for agreement has to be met, noting: "That is what was offered to the people. That is what their political leaders must deliver."

At present, Labour's proposal is for increasing the power to vary income tax from 10p to 15p, meaning three-quarters of basic rate income tax in Scotland would be controlled by Holyrood. But it is now thought several senior figures, including Scottish leader Johann Lamont, want to go much further.

In contrast, Gordon Brown has spoken forcefully about not falling into the "Tory trap" of devolving all income tax powers as, he argues, this could limit Scottish MPs' participation in financial votes at Westminster, most notably the Budget, which would harm Scotland and the Union.

The vow, signed by all six party leaders north and south of the border, committed them to a stronger Scottish Parliament while retaining "full representation" for Scottish MPs in the House of Commons.