Shadow Chancellor Ed Balls has warned David Cameron's plans to restrict Scottish MPs' voting rights could destroy the Union.

The Labour MP defended the right of Scottish MPs to vote on English income tax rates. The issue was hotly contested as the parties thrashed out the Smith Commission proposals on extra powers for Scotland.

In the end, Labour backed plans to devolve almost all of income tax to Holyrood. But the party secured what it considered cast-iron guarantees from the Tories that there would still be a UK-wide budget on which Scottish MPs would vote.

Within hours of report's publication, however, No 10 suggested Scots could be barred from budget votes, including on English income tax rates. Labour and the Liberal Democrats hit back, accusing the Tories of betraying the spirit of Smith.

Labour warn that the different forms of English Votes for English Laws suggested by the Tories are attempts at gerrymandering. They fear they could prevent a future Labour government getting legislation through Westminster and even ensure a Scot could never again become Chancellor or Prime Minister.

Mr Balls said that following devolution there was an issue, but added: "If you start having different classes of MPs you will destroy the Union and undermine prosperity in every part of our country; I am not going to be part of that."