Margaret Thatcher's government considered suspending the controversial Barnett formula amid accusations Scotland had its "snout in the trough" of public spending.
That claim came from David Willetts, the one of Mrs Thatcher's advisers and until earlier this year a minister in David Cameron's government.
The revelations will lead to accusations the Conservatives have wanted to scrap the controversial funding calculation for decades.
The Prime Minister signed a pledge to keep the Barnett formula - which regulates spending in Scotland in relation to England - as part of his "vow" just days before September's independence referendum.
Critics claim the calculation gives Scotland too much money per head, especially in relation to England, although the amount is less than in Northern Ireland.
Last night SNP's Stewart Hosie said: "Tories at Westminster who have shown they cannot be trusted to act in the interests of people in Scotland."
Documents newly released under the '30 year' rule - which is gradually being changed to a 20 year rule - show the discussions within Mrs Thatcher's government at a time when ministers are concerned with public spending cuts.
On July 2 1985 Mr Willetts writes to Mrs Thatcher: "Scotland and Northern Ireland have their snouts well and truly in the public expenditure trough."
"The challenge is to find a politically achievable way of putting them on the same diet as the English," he adds.
A note dated August 22 1985, reveals that Mrs Thatcher had vetoed a proposed "needs assessment" evaluation, designed to prove that that Scotland and Northern Ireland were getting too much money, the previous year.
In the document the Prime Minister was reminded that she said no to that particular idea because "it offered the prospect of an almighty row without immediate savings".
Instead of such a study, her Chief Secretary to the Treasury suggested, she should consider suspending the Barnett formula.
This would, in effect, the memo says, keep the amount of money transferred to Scotland at the same level in cash terms in 1986 and 1987.
The formula is still the subject of significant controversy, despite Mr Cameron's pledge to retain Barnett.
Earlier this year a Westminster committee claimed that higher public spending in Scotland made people south of the Border 'bristle' with anger.
Mr Cameron has also moved to reassure English MPs that the impact of the formula will diminish the more extra powers over income tax assigned to Holyrood under current proposals signed up to by all the major parties.
Shadow Scotland secretary Margaret Curran said: "The Tories were, and still are, totally out of touch with Scotland and the specific needs that are reflected in the funding we receive through the Barnett Formula."
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