BORIS Johnson once asked if handing Scotland full powers over tax and spending decisions would “buy off” the SNP, Nicola Sturgeon has said.

The First Minister made reference to the comments as she called for a “greater basket” of tax-raising powers, including over VAT and national insurance.

At an event hosted by the think-tank Reform Scotland, Ms Sturgeon said she had not had many dealings with Mr Johnson, who is widely expected to be the next Prime Minister.

But she recalled walking beside him the day after the 2015 general election, at the VE Day commemorations in London.

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She said: “Boris and I walked along together and I think he said something to me like – I’m not directly quoting here for the journalists in the room – but it was something that was along the lines of, ‘So Nicola, full fiscal autonomy – does that kind of buy you guys off?’”

The context around the remarks is not clear, but Ms Sturgeon joked it would be the “starting point” of her relationship with Mr Johnson if he secures the top job.

She earlier launched a stinging attack on the former foreign secretary's suitability for the role.

Ms Sturgeon said it is “surely deeply concerning that the Conservative Party is even contemplating putting into the office of Prime Minister someone whose tenure as foreign secretary was risible, lacking in any seriousness of purpose or basic competence and who, over the years, has been gratuitously offence to so many, from gay people, to Africans, Muslim women and many others”.

Elsewhere, she said the SNP’s income tax policy had “bust the myth that no Government can raise taxes and remain popular”.

However, she said the relative rate of taxes in the rest of the UK would always be a “consideration” as Scotland seeks to remain competitive.

She insisted Scotland “can’t continue to fund things through increases in income tax”, and called for a “basket of revenue raising options”.

Ms Sturgeon was speaking at the Reform Scotland event to mark 20 years of devolution.

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She warned a Tory Party led by a “reckless leader” would do more damage in Scotland in 18 weeks than Margaret Thatcher and John Major did in 18 years, adding: “Because by the end of October, Scotland could be heading for a no-deal Brexit.”

Elsewhere, she said the debate around transgender issues had become “very, very vexed” and was “dividing opinion” within the SNP and other parties.

But she said the SNP’s plans to reform the Gender Recognition Act to allow transgender people to self-declare their gender would bring Scotland into line with “international best practice”.