Scots bonus formula 'has to be axed' says Labour think tank

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It warned that the unfairly large amounts of public money being pumped north of the border are putting a strain on unity.

The Institute for Public Policy Research called for Scotland to receive money from the Treasury in exactly the same way that cash is allocated to other regions.

The current spending formula is putting strain on English-Scots unity, claims the think tank

And it said that if Scottish politicians want any more, they should be given powers to raise it in taxation from the Scots themselves.

Extra money goes to Scotland under the Barnett formula, a system worked out in the 1970s by then Labour Treasury minister Joel Barnett. Currently, Scots receive £5,676 each in public spending, whereas the English average is £4,523.

The report comes as Gordon Brown faces deepening problems with Scots voters. He is at risk of losing the once rock-solid seat of Glasgow East in a by-election.