Westminster has no plans to review the system which decides how much public money Scotland gets, Downing Street insisted today.
The move followed reports that Prime Minister Gordon Brown has ordered a review of the Barnett Formula, which calculates how much money goes to the devolved areas.
The Daily Telegraph said Mr Brown had ordered a review at a Downing Street meeting on January 28 attended by Chancellor Alistair Darling, Justice Secretary Jack Straw, and Scottish Secretary Des Browne.
The move was said to be at the prompting of Mr Straw, who said it was needed to deal with concerns from English constituencies about the funding mechanism.
But sources today indicated that Mr Brown had simply asked the Chancellor to prepare a factual paper on the formula.
This is being done with an eye to the fresh look at devolution which Labour had committed to - a process described as a "commission" by Scottish Labour leader Wendy Alexander, but merely as a "review" by Mr Brown.
A Downing Street source insisted today: "As has been made perfectly clear, there is no plan for a review of the Barnett Formula, now or in the foreseeable future."
In a TV interview last month Mr Brown said: "I think what will happen is that the Treasury will produce a paper on the Barnett Formula and what the Barnett Formula does, but that's a matter for the future as well."
The formula sets Scotland's share of public spending, and results in greater spending per head of population than in England, although it defenders argue that areas like London benefit massively from types of public spending not covered by the formula.
A Number 10 spokesman said: "There are no current plans to change the Barnett Formula.
"It is not the case that the Prime Minister has ordered a review of the Barnett Formula."
The spokesman added: "The Scottish Parliament has recently approved a review process aimed at strengthening devolution.
"As the Government announced to Parliament in January, the Chancellor will lay before Parliament a factual paper on the funding mechanism for the devolved administrations but there are no current plans to change the Barnett Formula."
But the SNP MP Stewart Hosie said: "It is extraordinary that Gordon Brown appears to have agreed to review the Barnett Formula in response to Jack Straw's grievance about spending south of the border."
Mr Hosie, the SNP's Treasury spokesman went on: "It's clear that the Prime Minister was backed into a corner - and the very obvious motivation of Jack Straw is to slash Scottish spending, despite burgeoning North Sea revenues and the fact that the spending settlement was very much worse in Scotland than south of the border.
"This insight into the machinations in Downing Street entirely vindicates the position of the Scottish Government that the only acceptable alternative to the Barnett Formula is full fiscal independence for the Scottish Parliament."
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