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.