Declaring an end-date by when the fiscal framework on more Holyrood powers will be completed would weaken the UK Government’s negotiating hand, peers have been told, as one former Minister complained that without its details Westminster was being asked to make decisions on “a wing and a prayer”.

The framework, which underpins the transfer of more tax powers to the Scottish Parliament, is currently being negotiated between officials and Ministers in London and Edinburgh.

It was due to published by the autumn but concerns have arisen that, if a proper mechanism is not agreed, then Scotland, over time, could lose hundreds of millions of pounds as the annual block grant is reduced and the new tax powers are introduced.

Indeed, peers were told, in such a scenario, that over 20 years Scotland’s budget could be reduced by as much as third ie several billion pounds.

Lord Dunlop, leading for the Government on the Second Reading of the Scotland Bill, told peers the legislation would turn Holyrood from a “pocket-money parliament…to a powerhouse parliament”, whereby it would control more than 50 per cent of spending in Scotland, some £11 billion, and almost £3bn in welfare expenditure.

But in recent days two influential Lords committees have expressed concerns that, without the details of an agreed framework, peers are being asked to legislate “in the dark”.

Lord Hollick, the Labour chairman of the Economic Affairs Committee, tabled an amendment to delay the passage of the bill until the framework was published.

Lord Dunlop said that the framework was “critically important” but both governments would “not give a running commentary” on it.

“Negotiating in public is not conducive to reaching an agreement,” declared the Scotland Office Minister.

He stressed that the Government was committed to reaching an agreement as soon as it could after tomorrow’s Spending Review and the draft Scottish Budget on December 16.

“We can’t guarantee when the negotiations will end; that’s not in our gift. To try to set unilaterally a specific date risks weakening our negotiating position,” he argued. “Both governments need time and space to reach an agreement which is right for Scotland and right for the UK as a whole and is built to last.”

But Labour peer Lord Foulkes, the former Scotland Office Minister, asked what was the UK Government’s “Plan B” if: the Scottish Government concluded it would be better off retaining the current system - a block grant - rather than relying on raising its own taxes through Holyrood; an agreement on a fiscal framework was not agreed and the Scottish Parliament did not give its legislative consent to the bill.

Lord Dunlop insisted the Government was “working and planning for success”. He pointed out the two governments were working constructively together, “good progress” was being made and they were working towards reaching agreement as soon as possible.

Labour’s Lord Reid, the former Home Secretary, picked up on the Government’s decision not to announce unilaterally a timeline, because it would be unhelpful, saying he was surprised by this given the Vow had a number of timelines to it, including St Andrew’s Day and Burns Night.

“Would it not be helpful at least to have some indication of the sort of timescale in which they want to reach agreement,” said the Labour peer.

His colleague Baroness Liddell said she was concerned because the Lords was legislating “on a wing and a prayer”.

“Changes to taxation have to be meticulously looked at because they have an impact on other parts of the taxation system,” explained the former Scottish Secretary. “I am extremely worried we will end up taking decisions that we cannot back out of it and will have a negative effect not just on Scotland but on all of the UK.”

Lord Hollick told peers that Ministers declined to appear before his committee, citing the need to maintain confidentiality until agreement was reached, which meant the terms of the framework were “shrouded in mystery”.

He pointed out one of its most crucial aspects was how much the block grant would be reduced in future years – so-called indexation - as Holyrood raised more of Scotland’s taxes and controlled more of its spending. The mechanism of indexation used was, therefore, crucial to how much money was raised in future.

“If it’s not transparent and judged to be fair, it will become a source of annual grievance,” he explained, noting how the committee looked at three different indexation mechanisms.

“In each case, even if Scotland matched the UK economic performance and grew its tax base by the same rotas of the UK, the amount deducted from the block grant would be bigger than the revenues collected from tax.

“Within three or four years, the Scottish budget could be hundreds of millions lower as a result. Over 20 years, we calculated it would be reduced in real terms by between 34 per cent and 27 per cent. This is unlikely to be a recipe for harmony between nations.”

He added: "The Government's haste to legislate risks adding insult to injury. Not only is this major constitutional change being made on the hoof, it's also being made in the dark."