Donald Dewar, Secretary of State for Scotland, claimed victory after early results from council areas showed support for a Parliament running at almost 80 per cent and for granting it tax-varying powers at a comfortable 67 per cent.
"This is a great day for Scotland, one of the most important days in our country's long history," Mr Dewar said. "We have done the business and given an emphatic thumbs up to a Scottish Parliament with real powers. This is an historic decision and also the first step towards modernising the government of Britain."
However Mr Dewar's assertion that the referendum result would "strengthen" the United Kingdom was at odds with an equally confident claim by Alex Salmond, leader of the Scottish National Party, that it was a "firm step" in the direction of independence. Scotland was restoring its parliament after 300 years and it was going to be done "not with a whimper but with a bang", Mr Salmond said. The Parliament will have control of a pounds 13bn budget and run most of the country's domestic affairs.
Relieved ministers hoped that the enthusiastic response of the Scots would fire up the people of Wales to vote for an assembly when they go to the polls next Thursday. The Welsh Office minister Peter Hain said Scotland had lead the way and Wales would follow.
A resounding Double Yes vote from Clackmannanshire, Scotland's smallest mainland council, was the first declaration at 12.45am, greeted with relief by home rule campaigners. The parliament was backed by an emphatic 80 per cent and tax-varying powers by a 68.7 per cent. South Lanarkshire, one of Scotland's largest council areas, and Renfrewshire followed suit with similar results.
The jubilation of the coalition parties was slightly dented when the Orkney islanders voted by 53 per cent to 47 per cent against tax-varying powers. However the modest majority in favour of a Parliament was a turnround from 1979 when the independent-minded islanders voted overwhelmingly against devolution.
Labour could win overall control of the new Parliament even under the proposed proportional representation system according to an NOP poll for the BBC released last night. A telephone poll of 2,000 people showed 51 per cent would vote Labour in elections to the Edinburgh parliament. The SNP were second on 33 per cent, followed by the Conservatives on 18 and the Liberal Democrats on 12.
A parliament for Scotland will have repercussions for Westminster and its confrontational style of politics way beyond anything most MPs have yet contemplated, according to leaders of the coalition that has worked effectively for home rule. Well before the polls had closed political parties were looking ahead to composition and character of the new assembly. Mr Dewar is being tipped as Scotland first "prime minister" - the officially titled First Minister who will head the devolved administration. The 60- year old lawyer was typically reticent when asked whether he wanted the job, but close colleagues believe he would be an "excellent" choice.
The dual mandate allowing existing Westminster MPs to serve in a Scottish Parliament would enable Mr Dewar to be both Scottish Secretary in Tony Blair's Cabinet and the First Minister in Edinburgh.
"Donald has done an incredible job in preparing for the referendum," said a Government colleague. "He is well respected in Scotland and is the kind of person that could give the parliament credibility from day one." Asked about how he felt about the job as he cast his vote at a Glasgow primary school, Mr Dewar said: "Good heavens, I am hoping I am going to see a very good turn out. Beyond that I have to be cautious."
The repercussions of setting up a parliament in Edinburgh will be considerable. At least a dozen Labour MPs with seats in Scotland are believed to want to stand for the new body. Mr Dewar and Henry McLeish, the devolution minister, have both voiced an interest.
Competition to get on Labour's panel is expected to be fierce. It is likely to be restricted to about 200 names and will be vetted by the party leadership in London to keep out the municipal time-servers of the Central Belt who have severely tarnished Labour's image.
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