Scotland may have to pay back its entire £126 billion share of UK debt under the SNP's plan for full fiscal autonomy, according to Alistair Darling's former right-hand man at the Treasury.

Autonomy within the UK could create a "moral hazard" with Scottish spending decisions impacting on the creditworthiness of the rest of the UK, but its taxpayers would have no say in those decisions, Dr Angus Armstrong said.

Dr Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research and a former civil servant who steered Mr Darling's Treasury through the financial crisis, was giving evidence to Holyrood's Finance Committee.

The Smith Commission on devolution proposed a solution to this hazard by empowering Westminster to levy a new UK-wide tax to manage economic shocks.

But Dr Armstrong said this would be a recipe for "a 21st-century Boston Tea Party", in reference to the backlash against an 18th-century tea tax which ultimately led to America's independence from Britain with the phrase "no taxation without representation".

Nicola McEwen, associate director at the Centre on Constitutional Change, said such anomalies are evidence the UK Government's response to Smith is not an "enduring settlement" and will have to be revisited.

Professor Charlie Jeffery, senior vice-principal at the University of Edinburgh, rejected Mr Armstrong's "cliff-edge" interpretation of autonomy, insisting the transition would be managed over time.

Dr Armstrong said: "If no tax revenue were to accumulate to the UK Government, then in terms of that negotiation how would the rest of the UK make sure that they were always protected?

"One way would be that there was no tax liability from Scottish taxpayers to the rest of the UK."

SNP MSP Kenneth Gibson, the committee's convener, said: "Surely if this did actually happen the debt could be assigned to Scotland and the interest or whatever paid.

"You're not seriously expecting Scotland to actually pay that debt to the UK? From where? Where would Scotland find £126 billion overnight?"

Scotland's £126 billion share of the debt is almost equivalent to its entire annual onshore gross domestic product (GDP) of £133 billion, according to Scottish Government figures.

Dr Armstrong replied: "This is the issue of full fiscal autonomy.

"The rest of the UK would have no liability to Scottish taxpayers because it would be getting no revenue from them.

"Just an agreement to pay the interest would leave the rest of the UK households exposed to the stock of debt, which at the moment is the equivalent responsibility of Scottish taxpayers."

He added: "I thought that paragraph in the Smith Commission which said the UK could always introduce a new tax to deal with this was highly unlikely to be successful."

In a submission to the committee, he said: "This idea that the UK Government could introduce a new tax if conditions required as proposed in the Smith Agreement would be likely to trigger a 21st century Boston Tea Party."

Ms McEwen said: "I don't think the Smith proposals or their translation into the draft clauses was an enduring settlement.

"I think there are elements in there that would have created new anomalies, which would have meant we would be revisiting it before too long.

"Look at the example of the tax powers we have been discussing, if you devolve income tax on earned income only and this parliament chose to raise the higher rate of income tax, it's not beyond the realms of possibility for high earners to shift their income into unearned income - savings or dividends - or to change residence status if that is an option open to them."

Mr Jeffery said: "My reading of the situation that Angus describes is that it wouldn't happen in one go.

"We've heard from SNP sources the full financial responsibility, as I think we now call it, would be phased in.

"In a sense, that process is already under way with the very limited amount of fiscal autonomy established for the Scottish Parliament at the outset being supplemented as the Scotland Act powers come in with some variation on the Smith proposals likely to be pursued."

He added: "That sounds to me like grubby politics at play, which wouldn't leave us at the cliff-edge assumption that Angus has set out."