PEERS are today calling on David Cameron to halt his flagship Scotland Bill.

In a dramatic intervention, the influential House of Lords Economic Affairs Committee delivers a damning verdict on the process of giving Holyrood more tax and welfare powers.

In a report, "A fracturing Union?", the committee says it is being done with "undue haste", without adequate information and transparency and involves too little assessment of the economic and political consequences both for Scotland and the rest of the United Kingdom.

"Nobody knows what is going on," it complains.

The focus of the peers' concerns is the so-called "fiscal framework", the arrangement being worked on by officials and Ministers in London and Edinburgh to determine the level of money raised by the new devolved taxes and what the consequent contribution to Scotland should be from UKwide taxes.

A deal was supposed to have been concluded this autumn but the two governments have been unable to agree on the mechanism for cutting Scotland's annual block grant from the Treasury when its new tax-raising powers come into force.

The peers want the Scotland Bill - due to be debated at Second Reading in the Upper Chamber next week - to be stopped before the subsequent Committee Stage in mid-December so they can consider the fiscal framework when it is published. The latest indication is this will be in mid-January.

The committee will table a motion to get the backing of the House of Lords to freeze the legislative process; it appeared confident it would get it.

But Lord Hollick, its chairman, said that what peers wanted was for the UK Government itself to "see the merits of the case we have made " and halt the legislation itself until after the framework was published.

"Without being able to understand how the fiscal arrangements work, it is most unwise that this bill should be enacted," declared the Labour peer.

"This very significant process of devolution...will impact not only on Scotland but on the other nations of the UK. We are at a moment of time where a very significant, long-term decision is being taken and in the absence of a fiscal framework, it is being taken, frankly, in the dark."

Lord Hollick warned that, over time, hundreds of millions of pounds were at stake and that if an unsound system were introduced, then "the public finances of Scotland could be seriously damaged and seriously undermined."

He commented on remarks made to The Herald by leading Scottish economist, Professor Anton Muscatelli, the principal of Glasgow University, who warned that the wrong framework mechanism could short-change Scotland by hundreds of millions of pounds.

The committee chairman pointed out how, under one option put forward, Scotland's block grant would "fall to a very, very low level 2015/16 from £19.4bn to potentially £12.8bn in 2035".

He went on: "So over a 20-year period there would be a very substantial decline, which would place Scotland in a very, very disadvantaged position. We are talking hundreds of millions of pounds here, which would affect the ability of the Scottish Government to provide the services it wants to provide...They would be seriously circumscribed and curtailed."

Lord Forsyth, the former Tory Cabinet Minister, likened the process to a car, where the bill was the body and the framework the engine.

"I don't know anybody who'd buy a car based on the body-shell rather than what would drive the car...It's not that it is botched; we are not in a position to consider what it is that is being proposed," he argued.

The committee also says:

*a proper impact assessment needs to be undertaken given almost all income tax, some £11 billion, is due to be devolved and that this will "weaken the ties" between Scottish taxpayers and the services provided for the whole of the UK;

*a "no bail-out" rule between the UK and Scottish governments would not be believed by the markets and, instead, there should be clear borrowing limits for the Scottish Government;

*the so-called "no detriment" rule was "unworkable" and would be a "recipe for continuing conflict";

*the Barnett Formula, which distributes additional funding to the devolved governments, should be scrapped and replaced with a needs-based assessment and

*to create greater transparency and better scrutiny, the Office for Budget Responsibility alongside the Scottish Fiscal Commission should examine the funding arrangements.

The report concludes that the proposed arrangements "could lead to friction and to regular disputes. Without a complete fiscal framework underpinned by clear principles, securing an enduring settlement will remain an aspiration".

It says if its concerns are not addressed, then "the future of the United Kingdom could well be at risk".

John Swinney, the Deputy First Minister, said: "We have made it clear, we will only support a Legislative Consent Motion on the Scotland Bill if there is a satisfactory and fair fiscal framework agreed between the Scottish and UK Governments. We will never sell the people of Scotland short.”

A UK Government spokesman said framework discussions had been "constructive" and he welcomed the Lords' report as an important contribution to the debate on devolution.

The spokesman said both governments aimed to complete the framework as soon as possible but had agreed not to comment until a final deal had been reached.