Chancellor Gordon Brown was last night facing a revolt from English Labour MPs because he is refusing to alter the Barnett formula, which sets out the proportion of public money going to each country of the United Kingdom. His office pointed out that spending plans were set until 2004 and said that there were no plans to review the formula.

Brown's main rivals, Peter Mandelson and John Prescott, have both said that it is time to look again at the formula, but senior Scottish politicians have defended the status quo, saying that services were often better in Scotland because more money was raised through council tax.