David Cameron's government has opened the door to giving more powers for Scotland - before the most recent devolution agreement has even been implemented.

 

The move comes just days after senior Tories demanded all tax and spending be devolved to stop Scots treating England "as a piggy bank".

The Conservatives have already agreed to introduce the proposals thrashed out by the cross-party Smith Commission.

But newly appointed Scottish Secretary David Mundell signalled that greater powers on top of that agreement would be "debated and discussed" with Scotland's new army of 56 SNP MPs.

The SNP has called for the gradual devolution of all tax and spending, otherwise known as full fiscal autonomy.

However, one leading think tank has warned that such a move could create a £7 billion black hole in Scotland's finances.

Speaking outside Downing Street Mr Mundell said that the Conservative Government still planned for bring forward the Smith Commission proposals in the Queen's Speech.

But he signalled that ministers would also be open to amendments from the SNP , who now make up the vast majority of Scottish MPs.

Mr Mundell said: "We are going to see the government bring forward the Smith Commission proposals, and then we are going to have debate and discussion on the floor of the House of Commons.

"That is the way that it should be and it is the opportunity for MPs to make their views known in the usual way".

Mr Mundell spent around half an hour inside No 10 after being called to speak to the Prime Minister.

Asked what they talked about he said: "We have had a discussion about how we are going to shape the Scotland Office going forward.

"I can give the absolute guarantee it will not be business as usual.

"We will ensure that the UK Government in Scotland is effectively represented, that we take forward the Smith Commission proposals which will provide an opportunity for debate and discussion on the future of Scotland.

"And that is a debate and discussion in which I'm sure that all Scotland's MPs will be playing a full part".

Stewart Hosie, the SNP's deputy leader said the fact that the Conservatives were prepared to move on he issue was a victory foe the SNP.

He said: "At the time of the Smith Commission, the Tories, Labour and Lib Dems all said that this was as far as more powers for Scotland could or would go.

"Less than six months later, and the decisive mandate of the people of Scotland for the SNP's manifesto is already requiring change and progress for Scotland."

At the weekend former Environment Secretary Owen Paterson called on Scots to be responsible for "the money they spend.

"They cannot treat England as a piggy bank to be raided so they can go round promising free this, free that and expect the English to pay," he added/.

Meanwhile, a growing number of voices at Westminster suggest creating a federal system could stave off Scottish independence.

Alistair Darling, who led the Better Together campaign, said that in light of the SNP landslide the Smith Commission proposals had been "completely overtaken by events".

"It won't do the business for Scotland. It's lopsided and therefore it's unfair to England. If you compound that, as David Cameron has suggested, by saying essentially English MPs will decide tax and spending, you are well on the way to breaking up the Union," added the former Labour Chancellor.

He argued that as an alternative the UK should move towards a federal system, where Scotland, Wales and Northern Ireland had more responsibility for raising the money they spent and the anomaly where Scottish MPs can vote on English matters was removed.

Michael Moore, the former Liberal Democrat Scottish Secretary, who lost his Borders seat, said the UK faced a "defining moment" and either the Unionists and Nationalists "reach an accommodation or end the Union; it's that clear it seems to me".

He added: "This is the moment when bluffs get called and people can decide; are we for a federal UK or do we start the process of separating?"

Lord Forsyth, the former Conservative Scottish Secretary recommended the UK Government draw up a White Paper, setting out the pros and cons of full fiscal autonomy for Scotland.

"We just can't go on with this piecemeal additional powers and tinkering with the constitution, which as we've seen simply feeds the Nationalist tiger."

He added: "It may well be if people are aware how damaging fiscal autonomy could be to public services and to the general body politic in Scotland, people will be less enthusiastic but we owe to the people who voted in such overwhelming numbers to bring forward these proposals and if they carry support to implement them."

Elsewhere, Angus Robertson, who will be officially reconfirmed as the SNP's Westminster leader today, told The Herald: "David Cameron is going to have to deliver on The Vow on more powers for Scotland and enter into dialogue with First Minister Nicola Sturgeon on increased powers."

But he acknowledged that the SNP's 56 MPs could not force an end to the Tories' austerity programme.