The UK Energy Minister was accused yesterday of “squirming” in his attempt to dismiss the SNP's demands for a share of the extra revenues being generated by soaring oil costs.

The SNP claimed that Malcolm Wicks was unable to defend his support for an oil fund set up by the Norwegian Government while refusing to back such a scheme for Scotland.

Mr Wicks had previously described Norway's fund as “attractive”, but he rejected SNP demands for a fund to be set up in Scotland from a share of the proceeds going to the Treasury as a result of higher oil prices.

Mr Wicks said: “We're not going to go down that route, this is a general contribution to UK tax revenues and we've used that money wisely to boost the economy.”

Kenneth Gibson, the nationalist MSP, claimed that Mr Wicks has been “caught out”. He said: “Malcolm Wicks was clearly squirming this morning as he tried to defend the indefensible. He thinks an oil fund is a good idea - but not for Scotland, and not now.”

Malcolm Wicks yesterday joined the Prime Minister and the Chancellor in rejecting the First Minister's demand for 10 per cent of the £4.5 billion windfall he claims that the Treasury will receive from soaring prices to establish the oil fund. Mr Wicks accused Alex Salmond of using the pain of higher fuel bills to make the case for independence.

He said: “Energy is a UK resource and it is used to benefit the whole of the United Kingdom.”

The Energy Minister also echoed Alistair Darling's assertion that oil revenues cannot be viewed in isolation, pointing out that higher bills mean people spend less thereby generating lower revenue in other areas.

“The tax revenues go into all the things people will understand, improving the National Health Service, better education, schools, all of those things,” Mr Wicks said.

“Of course Scotland benefits from that.” He added: “I guess Alex is trying to use this as another opportunity to try to rewrite the whole debate about devolution and his case for Scottish independence.”

And he dismissed claims that the revenues of the past 30 years have been squandered. “This has been an extraordinary benefit to Scotland in particular, not least in terms of jobs and businesses” he said.

Mr Salmond warned the UK Government yesterday that it would become “engulfed by public fury” unless it acts to reduce the impact of soaring energy costs.

The First Minister wants the UK Government to introduce a fuel price regulator, by which rising fuel tax revenues would be used to take the edge off fuel price rises. He said: “There won't be a public service that's not affected by high energy bills and the Chancellor can do something about

it if he uses the windfall to ease the pressure.

“And secondly, from a Scottish point of view, this is the moment when we must start an oil fund.” The SNP-led administration at Holyrood wants to set up an oil fund based on the Norwegian model, which is worth about £180 billion.

Oil industry experts claimed earlier this week that there could be almost as much oil left in the North Sea as has been extracted over the past 30 years. However, the oil that is left is more difficult and expensive to extract.

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