Donald Dewar, the Secretary of State for Scotland, was firmly in the running to become the First Minister of Scotland after publishing the Bill to create the first Scottish Parliament in 300 years.
Mr Dewar and Robin Cook, the Foreign Secretary, were rumoured to have met secretly over lunch to seal a Scottish version of the "Granita" pact in which Gordon Brown bowed to Mr Blair to run for the Labour leadership. It was claimed that Mr Cook would become First Minister while Mr Dewar opted for the less powerful post of speaker of the new Scottish Parliament.
Mr Dewar denied any pact, and sources close to both Mr Dewar and Mr Cook made it clear yesterday that Mr Dewar was still very much in the running for the post as chief minister in the executive for the Scottish Parliament.
Mr Dewar has never concealed his ambition to stand in the Scottish Parliament and showed no sign of bowing to Mr Cook.
The Foreign Secretary's friends said Mr Cook was "undecided" about whether to stand for the Scottish Parliament but was looking more likely he would opt to remain a key player in Westminster.
They will have to make up their minds within the next 12 months. Henry McLeish, the Scottish minister, said last night that the Labour Party will begin selecting candidates before the end of next year for the elections in the first half of 1999. It will be clear who is likely to be Labour's choice as First Minister before the Scottish voters go to the polls.
"Basically, we are looking at a situation were there would be no overall control by one party. The Labour Party will be the largest party but it will be less simple than having someone the Government wants who will go into that parliament as the First Minister," he said.
Mr Dewar said he was "elated" to be unveiling the proposals today and was looking forward immensely to the coming months.
The Bill's 40,000 words and 116 clauses fulfils Labour's manifesto commitment on devolution and puts into effect the referendum result supporting a parliament with powers to raise up to 3p in the pound in income tax.
The Scottish National Party promised to give it a "fair wind", and it was broadly supported by Scottish Liberal Democrats, but the Tories, who lost all their seats in Scotland at the last election, threatened to fight it, unless the Government backs down and allows the legislation to be taken entirely on the floor of the Commons.
The SNP said the Tories could upset their members in Scotland if they were seen to use their majority in the Lords to block the legislation. Michael Ancram, the Tory spokesman on constitutional affairs, warned that the talks between the opposition and government whips would have to deliver concessions.
The site of the Scottish Parliament will be announced early in the new year, and the salaries for Scottish MPs will be decided by the Scottish Secretary on advice from the top salaries review body.
The key points
Four-year term; presiding officer like the Speaker; clerk-like chief executive; Scottish executive - first minister with other ministers appointed by him/her; power to raise up to 3p on income tax; main funding through Scottish Consolidated Fund by UK government; MPs with Scots seats will continue to be able to sit in Westminster but number of seats can be cut.
Timetable: Royal Assent, second half 1998; elections first half 1999; Scots Parliament operational in 2000.
Powers: Scots Parliament will control health, education, local government, housing, social work, economic development, public bodies, tourism, air and sea transport, criminal law, prisons, environment, food standards, agriculture, sport and arts.
No power over: the Crown, UK Parliament, UK Foreign policy; UK defence and national security; protection of borders; UK economy; employment legislation; social security policy; regulations of professions including doctors; UK transport; abortion, human fertilisation, embryology; nuclear safety and licensing of cinemas.
The Scotland Bill confirms the overall supremacy of the Westminster Parliament and underpins the sovereignty of the Crown by ensuring that all Scottish Bills have to Royal Assent from the Queen before becoming Acts. Scottish Secretary will act as liaison minister with the new Parliament.
It follows the lines set by the Government's White Paper in July. But it does make several changes. These include: allowing individuals to stand for election alongside political parties on the regional lists, used under the Parliament's new party list system of proportional representation; Parliament will be able to pass legislation on dangerous dogs; membership of judicial committee, which is to settle disputes on Parliament's actions, adjusted to include senior judges.
Members of the Scottish Parliament (MSPs) may wish they had power over mainline services - the Scottish Office officials missed the launch in Glasgow because their sleeper train was delayed by snowdrifts outside Carlisle.Reuse content