A senior figure in Wendy Alexander's back-room team yesterday accused Scotland Office Minister David Cairns of being "out of step" with Labour members north of the Border after he dismissed calls for Holyrood to be given greater financial powers.

In an exclusive interview, Mr Cairns told The Herald the UK Government was opposed to any "massive restructuring" of the current set-up, which he said had delivered increased spending on public services.

He also took a swipe at what he described as "the McChattering classes" for focusing on more powers for Holyrood rather than on improving the lives of ordinary Scots.

His comments were seen as a blow for Wendy Alexander, Scottish Labour leader, who wants Holyrood's tax-raising powers to be reviewed by the Scottish Constitutional Commission, set up by her party and backed by the Conservatives and the LibDems.

A spokesman for Labour in Scotland sought to play down the significance of Mr Cairns's remarks by insisting the minister was outlining his opposition to independence rather than further powers for the Scottish Parliament.

"It's down to the interpretation of massive restructuring'," said the spokesman. "My reading is that the people who want that are the SNP."

But the senior member of Ms Alexander's Holyrood team told The Herald the majority of Labour members in Scotland backed greater powers for the parliament and accused party chiefs in London of looking at the matter "from the wrong end of the telescope".

The aide said: "David Cairns and some of his colleagues are out of step with party thinking.

"I would imagine that the bulk of the Scottish party believe in the dynamic of the situation, which is that if you ask the ordinary man or woman in the street do you think the Scottish Parliament should have more powers?' the answer overwhelmingly will be yes'.

"David Cairns has to realise that. There's a very clear mood for change in the context of the commission and for looking at ways to strengthen the devolution settlement.

"If you look at Scottish politics from a London perspective, then you don't see how things have changed post-devolution," the source added.

Labour has already sought to play down speculation that Prime Minister Gordon Brown wants to take charge of the constitutional commission.

That suspicion grew yesterday when it emerged that the head of the commission's secretariat will be Jim Gallagher, a civil servant "working across the Ministry of Justice and Cabinet Office".

LibDem MSP Robert Brown, yesterday accused Mr Cairns of living in a "Whitehall bubble". "I think he will find most people in the Labour Party and across Scotland do not agree with his view," he said.

The SNP also pounced on Mr Cairns's comments, which they said was a further blow to Wendy Alexander's leadership.

Keith Brown, the SNP back bencher, said: "It is a humiliation for Wendy Alexander, and also an embarrassment for the LibDems and Tories."

A source close First Minister Alex Salmond added: "For David Cairns to dismiss the people of Scotland as the McChattering classes' is foolish and insulting, and speaks volumes for why Labour lost the election.

"It is reminiscent of the dismissive way Michael Forsyth and the Tories rejected devolution - which is no doubt one of the reasons why Labour is suffering a similar fate in Scotland: out of touch and divided, and with a leadership crisis."

Meanwhile, Justice Secretary Jack Straw will today give the strongest hint yet that the government may draw up Britain's first ever written constitution.

In a speech to be delivered in Washington DC later today he will say that current constitutional reforms may only be a first step towards a complete overhaul of the UK's laws and principles.