MICHAEL Gove has insisted he acted out of “conviction not ambition” when he launched his surprise bid for the Conservative leadership and killed off Boris Johnson’s attempt to be prime minister.

Launching his campaign, the Justice Secretary drew on his Scottish background and claimed he would be a prime minister who “understands and believes in Scotland” as he set out a vision for a “new Union”.

Brexit, he insisted, would bring new powers to Holyrood over agriculture and fishing but he dismissed the notion of a second independence referendum, saying he did not think it would happen.

READ MORE: Michael Gove declares himself 'the candidate for change' in leadership pitch

Stressing how he was Scottish and British, Mr Gove said: “When I talk about the Union, I speak as someone born in Edinburgh, brought up in Aberdeen. I am someone for whom the Union is not a constitutional abstraction, it’s who I am.”

He spoke about the chance to “renew and reboot the Union” and how the country needed to see how it could develop a “fairly-funded, flexible and robust Union for our new circumstances”.

HeraldScotland:

But the SNP seized on these remarks, suggesting they raised a threat to Treasury cash flowing to Scotland with the possible axing of the Barnett Formula.

READ MORE: Michael Gove says he understands and believes in Scotland as he sets out his vision for a "new Union"

“It’s absolutely outrageous that a prospective prime minister is now using a Leave vote to imply that Scotland’s budget could be slashed; just months after the Tories agreed a new financial settlement for Scotland,” declared Michael Russell, the SNP convenor of Holyrood’s finance committee.

The clash came as today the right-wing think-tank, the Centre for Policy Studies, in a report suggested the economic situation facing Scotland should it opt for independence – a slump in the oil price and two-thirds of exports going to the rest of the UK – could transform the nation into "Greece without the sun".

And a major knock-on effect of the Brexit vote came as George Osborne announced he was dropping his target of having a £10 billion surplus by 2019/20. The chancellor told business leaders in Manchester the UK economy was bracing itself for a "significant negative shock" following the Brexit vote and so the UK Government had to be "realistic" about reaching a surplus by the end of the decade.

READ MORE: Justice Secretary Michael Gove declares himself 'candidate for change' in pitch to be next Tory leader and PM

In central London at his campaign launch Mr Gove presented himself as the “change candidate” and laid into his main rival Theresa May, dubbed in Whitehall as the “ice maiden,” saying: “What this country needs in a prime minister is not just a cool head but a heart burning with the desire for change.”

He also took another swipe at the Home Secretary, a Remainer who conspicuously kept a low profile during the In-Out campaign, stressing how the next premier had to have been on the winning side of the EU argument. “Put simply: the best person to lead Britain out of the EU is someone who argued to get Britain out of the EU,” he declared.

As the Scot made his pitch government colleagues were urging him to stand down so that the party could unite behind Mrs May, who is now the clear favourite and has already gained the endorsement of more than 70 MPs, including several cabinet ministers.

Anna Soubry, the business minister, who is supporting the Home Secretary, said: "I want Michael Gove to stand down. He's behaved appallingly. In his heart he will know he has. He has done his country, his party, the cause of politics and himself no good service whatsoever."

Mr Gove dismissed claims that his decision to stand was an act of treachery that forced his fellow Brexiter Mr Johnson to stand aside and denied it was carefully planned, saying there was “no calculation” and that he had always acted out of principle and conviction.

Addressing his previous repeated insistences that he did not want to be prime minister, he explained: “I was so very reluctant because I know my limitations. Whatever charisma is I don’t have it. Whatever glamour may be I don’t think anyone could ever associate me with it.”

But he explained he had, at every step of his political career, asked himself one simple question: what was the right thing to do; and he acted on that.

READ MORE: Michael Gove declares himself 'the candidate for change' in leadership pitch

The 48-year-old cabinet minister made clear that he would deliver on the commitments given in the EU referendum, so he would end free movement of people and “bring numbers down” on immigration but he gave no target date or level. He also promised to dedicate £100 million a week of the “Brexit dividend” to the NHS.

He emphasised how he would wait at least until 2017 to kick off the two-year process of negotiating the UK's withdrawal from the EU by invoking Article 50 of the Lisbon Treaty.

Meantime, Mr Johnson, in Devon to address local Tories, was asked how the week had been. He replied: "It’s been great in every possible way.”

The first vote in the leadership race will take place on Tuesday when one of the five candidates will be eliminated. Others will take place in the next fortnight before the choice between the final two is voted on by the 150,000 or so party members.

The new party leader and PM will be in place by September 9.