A manoeuvre that will unleash the dangerous ghosts of 1979

The hard-won self-confidence of Scottish Labour has been shattered

All the skeletons that cram the cupboards of Scottish politics glissaded out into the daylight last week and rushed gibbering at Mr Blair. Above all, there was the fear that Labour is preparing to sacrifice Scotland for the sake of power at Westminster.

In Scottish Labour, there was the terror of betrayal by London, the old but growing resentment of Walworth Road's ultimate control of the party and the gut dislike of Blairism in the more left-wing Labour establishment in Scotland. For the SNP, there was the suppressed horror of the moderate leadership who have tried to wean Nationalists from fundamentalism into support for devolution and now see the ground cut from under their feet. There was ill-concealed suspicion haunting the Scottish Constitutional Convention that Labour was only using the Convention for its own ends. In all parties, save the Tories, there was panic at the thought that the plan for Scottish self-government was being snatched away from Scotland and thrown back to the mercies of an English-dominated House of Commons, where it would be gnawed and filibustered to death as it was 20 years ago.

In itself, Blair's decision for a referendum on a Scottish Parliament makes sense. A devolution bill which followed a clear Yes vote by the Scottish people in a referendum would have at least moral protection against attempts to sabotage it at Westminster. The trouble is in the detail: first in the referendum question on tax-raising powers, and secondly in the way the decision was made - taken secretly in London, and then imposed without warning on Scottish Labour, on the cross-party Convention and on the Scottish people.

It's wrong to assume that Labour in Scotland always wanted Home Rule. In the 1970s, the Scottish executive scorned devolution as a right-wing diversion. It took the famous Dalintober Street special conference in Glasgow, at which the leadership sent its heavies up from London to change their mind. Bitterness about that split the party, and many Labour MPs and activists campaigned for a No vote in the 1979 referendum.

In the Thatcher years that followed, Scottish Labour was painfully reunited behind the devolution commitment. But this was on one condition: that the Parliament would not be just a talking shop but would have real economic powers to improve the lives of the Scottish people. That is why the tax- raising powers, marginal as they would be, are politically crucial.

For many in Scottish Labour, they are also the price for their consent to devolution. Without tax-raising powers, the bargain may unravel. Parliament would be more likely to get into dangerous confrontations with Whitehall over money - the size of the block grant. That would endanger the Union. It's a prospect which does not break the hearts of the nationalist wing in the Scottish party, but appals the Unionist majority - not least because it would begin a game that the SNP can play better than Labour.

The Scotsman's editorial on Friday questioned Tony Blair's good faith. Had he adopted the second referendum question about tax-powers in the hope that it would be defeated? "It is an unworthy interpretation, but a niggling one." Later that day, Blair insisted in Edinburgh that this was "emphatically not" his intention, and he would campaign personally for a Yes. But the suspicion remains. Few people in Scotland were confident that the voters would opt for the chance to pay higher taxes.

In London, there is little grasp of how traumatic the word "referendum" is in Scotland. The 1979 referendum produced a narrow Yes majority, but it could not be honoured because of the wrecking Commons amendment which demanded that over 40 per cent of the electorate must vote Yes. Any referendum proposal still wakes fear that it is a plot to strangle self-government again. Another legacy of 1979 is the conviction that self-government is only safe if it is drafted and agreed in Scotland, rather than London.

Tony Blair, on paper, has launched a daring manoeuvre to protect his devolution flank against the Tories. In practice, through lack of imagination, he has shattered the frail self-confidence of his Scottish supporters. Scottish Labour will come round and accept his plan in time - what alternative have they? - and most of the broken china will be swept up. But getting the ghosts and skeletons back into the cupboard will take much longer.