BATTLE lines for next year's Holyrood election have been drawn after the SNP refused to back Labour's plan to reverse controversial tax credit cuts in Scotland.
The Nationalists claimed Scottish Labour would not be able to compensate families who stand to lose out using new powers being devolved to Holyrood.
Labour insists there are a number of possible mechanisms for maintaining incomes for around 300,000 families in Scotland who face losing £1000, on average, from April.
The issue, which is likely to dominate next May's election, will be debated by MSPs today.
A Labour motion calls on the Scottish Government "to restore tax credits to families using the new powers being devolved".
However, it will be opposed by the SNP, which last night tabled an amendment claiming there was "no proposed power in the Scotland Bill that would enable the Scottish Government to restore all tax credits".
To emphasise the point, the Nationalists also tabled an amendment to the Scotland Bill at Westminster calling for full control over tax credits to be devolved.
Scots Labour leader Kezia Dugdale announced at the weekend that she would fight the election on a pledge to reverse tax credit cuts.
If the party defies the odds and returns to power, it party will not implement planned income tax cuts for higher earners, when Holyrood gains responsibility for the tax in 2017, or the SNP's promised cut to flight duty to free up funds to meet the £355million cost.
Speaking ahead of the debate, Ms Dugdale said: "The vote on tax credits will be an important moment in the history of devolution.
"At long last everybody in Scottish politics is going to have to start talking about the responsibilities they do have, and how they would transform the lives of people in this country."
Labour insists a number of ways exist to ensure families do not lose out, including making special payments outside the tax credit system.
Earlier this week, Scottish Secretary David Mundell insisted Holyrood would be able to top up tax credits directly under the Scotland Bill, the legislation which is devolving extensive tax and welfare powers to Holyrood.
He made the pledge as he unveiled a series of changes to the Bill designed to clarify and expand Holyrood's new powers.
UK Government sources have indicated a future Scottish Government which wished to top up tax credits directly would have to pay HM Revenue and Customs to administer the scheme.
But Alex Neil, the SNP's Social Justice Secretary, said: "Under the Scotland Bill as it stands, the Scottish Parliament cannot restore all tax credits and does not have the power to reimburse all of those who will be affected."
Last night the SNP was accused of plotting to delay the Scotland Bill until after next May's election in a bid to stop the argument over tax credit cuts becoming a defining issue.
It emerged the bill's "fiscal framework," the financial agreement underpinning the new powers, will not be completed until next year, later than expected.
Labour's shadow Scottish secretary Ian Murray said: "The SNP should not be allowed to drag their feet on this agreement in order to delay the Bill and then suggest at the Scottish elections that the powers have not been delivered."
A spokesman for Deputy First Minister John Swinney said: "We will do a deal on the fiscal framework as soon as possible, but only if we believe it is a deal in Scotland’s interests."
Meanwhile, the Commons Work and Pensions Committee is today writing to the Treasury to ask again for information on the numbers of people flowing on and off tax credits
It also wants details of average duration of a tax credit claim after the Whitehall department declined to provide a response.
Chairman Frank Field MP said: “In devising and costing its tax credit reform and amendments to it, the Treasury must have crunched at least some of the numbers around flows of people on and off tax credits."
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