Commons leader William Hague will announce that his party has plumped for the least radical of three options put forward to resolve demands for “English votes for English laws”.
It would give an effective veto to MPs for seats in England - and Wales on some policies - over matters that are decided north of the border by the Scottish Parliament, but would still require a majority of all UK MPs to pass legislation.
SCOTSMAN TABLET AND MOBILE APPS
By rejecting a more far-reaching solution, Mr Hague risks a backlash from Tory backbenchers angry over the scale of extra powers that were promised to Holyrood to persuade Scots to reject independence in September’s referendum.
But they will be delighted at confirmation that financial matters would be included, raising the potential for serious difficulties for any future Labour government reliant on its own Scottish MPs - or the support of the SNP - for a Commons majority.
Critics say the move would contradict the cross-party Smith Commission which drew up new powers for Holyrood following the “No” vote and recommended MPs across the UK “will continue to decide the UK’s Budget, including Income Tax”.
Mr Hague though - who hopes to see the reforms debated in the Commons before the general election - will argue that it is a “fundamental issue of fairness”.
“How could it possibly be right for the Scottish Parliament, for example, to vote for a reduction in Air Passenger Duty in Scotland and then for Scottish MPs to come to Westminster and be able to impose an increase in Air Passenger Duty in England?
“You only have to think about this for a moment to see how fundamentally important this is and how such issues have to be addressed. Under our proposal this would not be possible without the agreement of English MPs.
“The English veto should be extended to taxation when the equivalent decisions have been devolved to Scotland - and under a Conservative Government it will be.”
Under the preferred option, only English MPs would consider the amending stages of legislation that relates only to England and have a veto via a procedure known as a legislative consent motion.
Welsh MPs would be included on matters not devolved to the Cardiff Assembly.
The resulting legislation would though still require the final endorsement of all MPs, and some Conservative MPs believe only the more radical option of giving them no vote at all on the matter would meet promises made by David Cameron.
The Prime Minister directly linked the English votes issue - the long-unresolved “West Lothian question” - to the granting of new powers to Holyrood in his immediate response to the rejection of independence by the electorate in Scotland.
He said a “decisive answer” should be drawn up “to the same timetable” as enhanced devolution but attempts at cross-party talks were boycotted by Labour as a “stitch up”.
Mr Hague will say retaining a final - Third Reading - vote “gives an effective veto to English MPs over matters only affecting England, or England and Wales, while maintaining the integrity of the United Kingdom Parliament.
“Both of these objectives are crucial, and both can be fulfilled by our chosen way forward.
“This would mean that all Members of Parliament would continue to vote on every aspect of the UK budget: it would continue to be considered as now, including in a Finance Bill Committee.
“There would be no issue with the Chancellor of the Exchequer representing a Scottish constituency. But where taxes have been devolved to Scotland the equivalent taxes in England would require the consent of English MPs.
“MPs from all parts of the UK will continue to be able to deliberate and vote together, but on both the details and principle of legislation and other decisions concerning only England, they will have to respect the decisive say of MPs representing English constituencies.
“Some people will argue that this will weaken the United Kingdom, but I say that failure to act would be the true weakening of the United Kingdom,” Mr Hague will insist.
A Downing Street source acknowledged there were “clearly different views” within the party but expected “very widespread support” for the chosen option.
Draft legislation was published last month which would give MSPs control of income tax rates and bands for the first time, with cash raised from the levy north of the border staying in Scotland.
Powers over air passenger duty (APD) are also to be devolved
Chancellor George Osborne has told MPs that whoever is in Number 11 after the general election should not be “beholden on Scottish nationalist votes”.
Once powers to set income tax have been devolved, Scotland would have to “live with the consequences” of its decisions - including if wealthy individuals flee across the border to escape “punitive” rates, he said.