Is this Cameron's real coalition deal?

David Cameron should consider a deal with the SNP at Westminster to stay in office, according to a leading Conservative.

Paul Goodman, the editor of the influencial grassroots website, Conservative Home, has called on the Tory Prime Minister to cut a deal with the SNP that would grant Scotland Home Rule in return for the nationalists not voting down a Queen’s Speech.

The deal, outlined on the former MP’s popular website, is gaining currency among senior Westminster Conservatives considering how to handle a hung parliament. This is the first time it has dared speak it's name.

The scenario is that Cameron, who would remain as Prime Minister if there was no overall majority, would have first move forming a government after May 7th.

He is being urged to come to an arrangement with the SNP who,  if they arrive in great numbers, could make or break a Westminster government.  So that they would not vote down a Cameron minority government’s legislative timetable in a Queen’s Speech an offer would be made.

The move would give Holyrood full powers over income tax, allowing it to retain oil revenues and only send a tax receipts to London to meet defence and foreign affairs costs.

It meets the key SNP demand for full fiscal autonomy, the last step but one from full independence, and would save the UK government billions in extra Barnett payments to Scotland.

Goodman wrote: “Remember, the Conservative Party has already offered more devolution to Scotland than Labour, through the Strathclyde Commission, which said that the country 'should have full powers over income tax' – three months or so before the Vow and six months or so before the Smith Commission.”

He adds: “The next logical step would be to offer Scotland Home Rule, together with Home Rule for all the Home Nations – including, of course, England – in a fully federal UK, as recommended in the ConservativeHome Manifesto.”

If it's on ConHome, it's being talked about in Tory High Command. Left to his own devices Cameron would grasp any deal that would allow him to stay in Downing Street, but a number of high Tories, many of them in the cabinet, feel that Home Rule is the slipway to separation and a betrayal of their Unionist principles. They will put the block on Cameron making the offer.

But counter that with the appeal for many Conservative MPs of English Votes for English Laws, a policy that would exclude Scottish MPs from voting on crucial aspects of the budget and pave the way for another Tory government.

Tories themselves are doubtful that they will ever see another Conservative Westminster majority in their lifetimes unless there is a gamechanging move. People I know have bet on it not happening.

British voters, like all western voters, are tired of elitist, centralist politics. Federalism could be the next move, and it could come from the right to get around a nationalist roadblock.

But...Alex Salmond explicitly ruled out a deal with the Tories in a round of Sunday interviews.

“Nicola Sturgeon has outlined this quite clearly,” said Salmond on Piennaar's Politics. “The Conservatives will be locked out if they do not command a majority in the House of Commons."

This is the same Salmond who says he can work on a vote by vote basis with Labour, something which in reality he doesn't want to countenance. As the ends are more important than the means for the SNP Salmond could sell a Home Rule deal as the way back from referendum defeat.

Iain Martin, the right-wing Scottish commentator, sagely warned today to disregard what any party says about ruling in or out unlikely coalitions just now.

The Tories did the same before 2010 and who could have predicted Clegg and Cameron in the rose garden.  In this fevered atmosphere, anything is possible.

The Tory pinch in Salmond's pocket

Why do the Conservatives this morning issue a poster showing a mini-Miliband popping out the  pocket of Alex Salmond? Not because it's funny, but because they know it works.

Focus group work in the England tell Tory strategists that voters fear the idea of the SNP having influence on a Westminster government. That worry makes them less likely to vote Labour.

Labour is now caught in a classic pincer movement by the SNP and the Conservatives, as the polling arithmetic shows that Labour falling short of a majority without SNP votes.

Cameron cannot advance the Tory cause in Scotland but he can try cutting the legs from under Labour in England, where the two main parties are tied.

If he raises the fear of a Labour-SNP coalition it turns voters off Labour in these English marginals. That could just be the difference between the Tories being able to form a coalition or the end of Cameron's career.

Alex Salmond tries to be as helpful as he can, claiming at his Gordon constituency adoption meeting on Friday that Westminster will dance to a Scottish tune. (He must be getting tired of saying that every time he stands for Westminster).

This time he added the rebalancing of infrastructure funding away from London to the list of SNP demands. A populist enough message north of Watford, but a very different signal to the London media who pick up the cue to warn their listeners and readers of the dangers of nationalism.

Why does Salmond say that? Because, for different reasons, both he and David Cameron want the same result  -a Tory government.

So while Jim Murphy and Labour MPs say they are rebuilding their Scottish constituency defences brick by brick against the SNP surge Cameron is eating away at the foundations of a Labour government by stirring nationalist fears in the south.

For the Tories nationalism is a handy tool indeed and Cameron appears willing to encourage a nationalist surge with out caring for the consequences. A Tory government would not be seen as having legitimacy in Scotland  with just one MP and the cuts to come will cause even more pain.

Add in a Tory referendum on the EU causing perhaps a constitutional crisis as well as one of democratic legitimacy and the ground is laid for another Scottish independence referendum.

The timing would be of  Nicola Strugeon's choosing as it is not reckoned the SNP manifesto for 2015 or 2016 will bind the leadership to a vote within a specific timeframe.