DAVID Cameron's compromise deal on Holyrood's new tax powers would have given Scotland more money since devolution than the current Barnett Formula has, according to the Treasury.

But this claim contrasts with Nicola Sturgeon's view that Whitehall’s current offer could leave it £3 billion out of pocket over the next 10 years.

The dispute - which lies at the heart of the deadlock between London and Edinburgh over the tax powers talks - erupted as MPs on the SNP-chaired Commons Scottish Affairs Committee backed John Swinney's preferred option for the so-called fiscal framework.

The Deputy First Minister believes the “per capita indexed deduction” option best protects Scotland’s funding into the future.

Greg Hands, the Chief Secretary to the Treasury, prefers the “levels funding” option; meaning that as the UK population is forecast to grow twice as fast as Scotland’s, it would not have to pay disproportionately towards Scotland’s public services.

But in a report, the committee – which it was highlighted has four Nationalist, four Tory and three Labour members – came out in “unanimous” support of Mr Swinney’s preferred option.

It also explained that for there to be fairness to both Scottish and UK taxpayers as Holyrood’s new powers are transferred, an “additional adjustment could be made to the per capita indexed deduction approach to ensure Scotland’s funding per capita does not increase beyond a certain point relative to the rest of the UK”.

Referring to what the report described as a possible compromise, Pete Wishart, the committee chairman, said: “If applied, this must ensure that Scotland’s funding per capita is no better or worse relative to the rest of the UK than if the existing arrangements remained in place. We invite the two governments to explore this solution.”

In its response to the report, the Treasury said: “The offer we have placed on the negotiating table is not only in line with the ‘no detriment’ principle but would have delivered more funding for the Scottish Government than the existing Barnett Formula since devolution in 1999.

“From the outset our position on the fiscal framework has been clear; we stand ready to do a deal that is fair for Scotland and fair for the rest of the UK.”