Despite fears that rebels could win a key vote on the issue, the party's Scottish executive narrowly approved a two-question referendum.
If Labour wins power, Scots will be asked if they want their own parliament, and whether they want it to have powers to raise income tax by up to 3p in the pound.
Under a new deal approved yesterday in Stirling, there will then be a second referendum once the parliament is operational before its tax-varying powers can be activated. This compromise persuaded at least two rebels to switch sides, though observers pointed out that the arrangement now gives Mr Blair a triple-lock on the "Tartan Tax" plan on which the Conservatives have capitalised.
Mr Blair's announcement of the referendum in June caused widespread anger in Labour circles north of the border. Home-rule enthusiasts said the second question, on tax, was designed to wreck devolution.
The ballot paper will make clear that a "yes" to the first question will lead to the creation of a parliament in Scotland.
The Labour leader said: "This decision brings a Labour government and a Scottish parliament that much closer."Reuse content