The Silk Commission provides a "coherent opportunity" to see how devolution is working in Wales 12 years on, Welsh secretary Cheryl Gillan has said.
MPs held a general debate in the Commons on Thursday on the Silk Commission which is conducting an inquiry into the way the Welsh government is funded.
Chaired by Paul Silk, the Commission is examining how the Welsh government is funded, looking at whether it should take further responsibility for raising the money it spends.
Opening the debate, Gillan said she believed the current system did not provide enough accountability for Assembly Members at Cardiff Bay.
She told MPs greater devolution could make the Welsh government more careful when it spends taxpayers' cash.
Gillan added: "It is surely better for the devolved institution to be accountable to the people of Wales not just for decisions on public spending in Wales, but by being responsible for raising some of the money needed to pay for those decisions."
Shadow Welsh secretary Peter Hain expressed fears that the commission would be used as a way to cut funding to Wales, he told MPs he was "deeply suspicious of the real Tory agenda" behind the review.
He said he was open to the idea of Wales raising some of the money it spends but "it must not be at the expense of a needs-based settlement which is vital for Wales".
Hain continued: "Silk must not become an excuse for this right-wing Government to offload its financial obligations to lower income to parts of the United Kingdom like Wales."
He said he was open to the idea of Wales raising some of the money it spends but "it must not be at the expense of a needs-based settlement which is vital for Wales".
Echoing his calls, Huw Irranca-Davies (Lab, Ogmore) demanded that any changes to the current arrangements should not financially disadvantage Wales.
He told MPs: "It would be wrong of any review to bring forward recommendations which were to the financial disadvantage to the people of Wales.
"The nature of the union depends on making sure areas that are disadvantaged economically receive some greater subsidy from other parts of the UK.
Gillan refused to "tie the Silk Commission's hands" but said it was "absolutely far from my motivation" to create a settlement which could leave Wales worse off.
Guto Bebb (Con, Aberconwy) supported giving the Welsh assembly more financial responsibility.
He told MPs: "We hear the Assembly Members criticise the cuts being made by Westminster and it is easy to make those criticisms because in the assembly there is no need to even think about the deficit because it is no responsibility whatsoever of the assembly."
Hywl Williams (Plaid Cymru, Arfon) said he wanted broadcasting and the issues surrounding S4C to be included in the review.
David Davies (Con, Monmouth) said he was tired of the "groundhog day" politics of endless commissions and extensions to powers in Cardiff Bay.
He said: "The West Lothian Question is the elephant in the room. Every time we give further powers to the Welsh Assembly we are weakening the United Kingdom.
"Surely the priority for us at the moment constitutionally is not to think about granting further powers to the Welsh Assembly, it is to think about ensuring all citizens in the UK have the same constitutional powers."
Roger Williams (Lib Dem, Brecon and Radnorshire) urged the commission to give Wales more powers to "drive forward" Welsh economic development and create jobs.
Labour welcomed news of the commission but were "wary of the [government's] motives for reviewing the funding arrangements for Wales".
Shadow Wales minister Nia Griffith called for a so-called "Barnett floor" to protect funding for Wales and urged the government to adopt fiscal policies to "stimulate the economy" there.
She said Labour was sceptical about plans to hand fiscal powers to the Welsh Assembly as it offered the UK Government the opportunity to cut spending.
Concluding the debate, Welsh Office minister David Jones rejected Labour's "suspicion" about the reason for the commission's creation, telling MPs: "This is not, by any means, an evil Tory Trojan horse. It is a genuine attempt to see if it is possible to arrive at a settlement that will be there for the benefit of the people of Wales in the long-run."
"The Welsh Government spends some £15bn of public money each year," he said. "It and the Assembly now have very considerable powers, indeed those powers now extend to primary law-making in the devolved areas.
"I think that there is little doubt, not only within the chamber but outside, that it is widely accepted that that level of power should be matched by accountability to the people of Wales, for the money that those institutions spend on their behalf."
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