David Cameron yesterday hinted that the Tories were in favour of reviewing how much money Scotland gets from the Exchequer when he admitted his party was asking itself whether the current share-out of UK spending was fair.

Like Labour, the Conservatives have studiously avoided grasping the nettle of the 29-year-old Barnett Formula. Mr Cameron, asked if Scots received too much money from England, replied: "We are not currently looking at it." Then he added: "It is a question we are asking ourselves: is the Barnett Formula right for 2007 and beyond?"

The formula, created in 1978 by Joel Barnett, then a Treasury minister, is based on population, not need, and is the mechanism by which Scotland receives extra spending as a proportion of that in England.

The issue was raised as the UK Government and opposition again clashed over the Tory policy of "English votes for English laws".

Last night, David Mundell, the Shadow Scottish Secretary, told The Herald: "We are not actively looking at it. We have no plans to change the Barnett Formula."

However, a front-bench colleague insisted: "There is concern Scotland is getting a far better deal through the current financial settlement than the rest of the UK, particularly England. Frankly, there needs to be a reassessment of it."

The senior Conservative made clear poorer parts of the UK, whether in Scotland or England, should get more money but noted: "What grates is if an elderly person in Scotland goes into a home, they get their care free, in England they have to sell their house to get the care. There are also tuition fees and other examples where Scotland seems to be getting a much better deal," he added.

David Heathcoat-Amory, a Tory former Treasury minister, told The Herald: "There should be a review because the current formula is just out of date." He said Mr Cameron's remarks were "a coded way of saying - yes, we do need a review".

Eight years ago, the spending per head in Scotland was £1000 more than in England, this year it is £1500 higher.

Mr Heathcoat-Amory, the MP for Wells in Somerset, said poorer regions such as the Highlands and Islands should get more money but argued that it was "not right" parts of urban Scotland, which were better off than some of their English equivalents, did so.

He added there was "a rising tide of resentment" south of the border about funding and he urged Mr Cameron to grasp the nettle to provide a fairer settlement that would strengthen the Union.

Labour MPs too appear to be becoming increasingly anxious about the level of public spending in Scotland.

Meanwhile, a report on "English votes for English laws", headed by former chancellor Ken Clarke, due out before Christmas, is expected to endorse the suggestion by Sir Malcolm Rifkind, the former Scottish Secretary, of an English grand committee in which English MPs would debate and vote on England-only issues.

As reported by The Herald earlier this month, Mr Cameron effectively endorsed Sir Malcolm's suggestion, describing it as "elegant". He insisted it was "a good option because it avoids the claim there are two classes of MP".

Yesterday, Caroline Spelman, the Conservative chairwoman, said Sir Malcolm's plan would give a "greater sense of fairness and complete the devolutionary process".

However, Harriet Harman, the Commons Leader, yesterday claimed it would lead to Scotland being "pushed out of the Union" while Ruth Kelly, the Transport Secretary, said it showed the Tories were now "an English party".

Alex Salmond, the First Minister, argued Sir Malcolm's proposal was unworkable, noting: "The right solution is to have a Scottish parliament and an English parliament as opposed to having some sort of spatchcocked solution to appeal for votes in Middle England."