Gordon Brown will endorse a major reshaping of Scottish devolution that would open the door to a separate tax regime north of the Border, with taxpayers in England and Wales seeing less of their cash going to subsidise Scots.

The Prime Minister, who described the plans as “bold and realistic”, last night met ministers to work out how to implement the findings of the Calman Commission, set up last year by Labour, the Tories and the Lib Dems to improve the way devolution works. The Times has been told that Mr Brown will include the recommendations for tax and borrowing powers for Holyrood as part of his programme for democratic renewal in the UK, after the MPs’ expenses scandal.

Mr Brown, along with David Cameron and Nick Clegg, will back the Calman report as a way of heading off the SNP threat to the Union, improving spending accountability at Holyrood and defusing anger in England over the costs of devolution.

One senior Cabinet minister said: “We have to grab this, get on with it and make it happen. It’s not a question of whether, but how we go about it.”

It is understood that the UK Cabinet discussed the report last Friday. Although it could take years for it to be fully implemented, the momentum behind it among the Unionist parties is such that even if Mr Brown loses the next general election, Mr Cameron will pick up the baton. The key finding of the commission, headed by Sir Kenneth Calman, the former Chief Medical Officer in England, is that Holyrood should have more powers to raise tax, increasing accountability and making it less reliant on the £30 billion Treasury block grant.

Sir Kenneth described the report as ushering in a stronger Scotland within a stronger United Kingdom. He predicted that MSPs would no longer be able to make decisions without worrying about how money was raised.

Michael Russell, the SNP Minister for the Constitution, welcomed the proposals but said that the report “fell far short of the requirements of our nation”. He added: “Scotland needs full fiscal autonomy . . . to raise all the money it spends and take the big economic decisions.”

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