Deputy PM says he will campaign for greater powers for English regions and Wales, regardless of Scotland's referendum result

Nick Clegg has said that "the cat is out of the bag" on devolution in the UK, predicting that the issue will dominate British politics whatever the result of Scotland's independence referendum. The deputy prime minister promised to be "on the picket lines" calling for greater decentralisation in England as he insisted that irreversible further powers would be handed to Scotland even after a no vote.

Clegg is due to give a major speech on the topic on Friday when he helps launch a report on decentralisation in England prepared by the centre-left thinktank the Institute for Public Policy Research.

The report sets out a 10-year timetable by which powers can be devolved to English cities and regions.

The plan identifies 40 different functions of government which need to be devolved and covers powers and budgets held in 13 different Whitehall departments.

The report argues for fiscal devolution to be a central plank of the 2015 Comprehensive Spending Review, with five-year funding settlements agreed and an independent body established to take forward further central-local funding reforms. It argues ultimately for property taxes and business rates to be devolved to combined authorities and, eventually, a proportion of income tax to be assigned to them.

With Tory MPs already unfurling the flag on English patriotism and John Denham, the Labour MP for Southampton Itchen, calling for an English Labour party, there are already signs that further devolution to Scotland will have a knock-on effect in Wales and England, as well as possibly Northern Ireland. There are also likely to be calls for further subsidies to Scotland to be cut. Clegg said: "I think it is really good we are devolving more power to Scotland and to Wales. But what about England? What about Manchester and Sheffield and great places like that? Why cannot they have more say about their own affairs? People are dead right: the status quo cannot carry on. We cannot have this very welcome process of devolution to the nations of the UK but somehow keep England centralised.

Clegg said: "I think the cat is now out of the bag and even if Scotland remains part of the UK, and there is a further devolution of powers to Scotland, we will see a massive debate and I want to be right out there on the picket line arguing in favour of more powers to cities and counties."

Clegg said the UK should be more like the US or Germany, where people are trusted locally and everything is not second-guessed by politicians and bureaucrats in Whitehall.

Insisting that the offer of further powers for Scotland was genuine, Clegg said: "My party has for generations been going on about the need to home rule in Scotland but within the stability and security of the UK.

"For the first time we [the main pro-unionist parties] are agreed that, assuming Scotland remains part of the UK as we all fervently hope, then there will be a further irreversible process of further powers in Scotland."

The deputy prime minister insisted this would not involve further subsidies from England to Scotland: "What we want to see is the vast bulk of taxes raised in Scotland; so far from asking for more money from the rest of the UK, this is about giving greater autonomy and responsibility to Scottish governments in the future."

He said similar powers had already been given to the Welsh through the process of the Silk commission although ministers have yet to decide whether to give the Welsh assembly more powers over policing and judiciary.

The belated offer of further powers to Scotland with a timetable means all three parties will have to go into the next election with more specific plans for a new settlement for the English within the union. Ed Miliband, the Labour leader, has already promised further devolution of spending power to city and county councils and nine ministers responsible for English regions. George Osborne, the chancellor, has called for powerful elected city mayors, and has been working with the deputy prime minister on a range of city deals.

Senior Labour sources believe the party may have to go further and deal with more controversial issues including the voting rights of Scottish MPs over English-only matters and the division of public spending.

David Cameron is facing even more unrest from within his party over the issue of Scottish devolution, led by John Redwood, a former cabinet minister, who claims 100 colleagues support his calls for a separate English parliament.

Andrew Percy, MP for Brigg and Goole, said further devolution for the Scots without a similar deal for the English would be seen as "intolerable" by many of his constituents and colleagues.

"I don't think the question of who is speaking for England has really been woken up to enough," he said. "We've been very tolerant for a long time. It's a particular problem in the north of England if Scotland gets more tax powers, as investors are often making a choice between Scotland and the north. There is a lot of disquiet across all the parties, particularly among northern MPs."

Percy said he did not detect much appetite for an English parliament among his own constituents, whom he has canvassed on the issue, but there was strong support for stopping Scottish MPs voting on England-only issues.

He said English voters are feeling so neglected that "Ukip could absolutely make hay if they changed their name to the English Independence party".

Andrew Tyrie the Treasury select committee chairman said: "It is important we arrive at a new settlement which is fair for all parties and therefore can be durable." A second Labour shadow cabinet member said there was a fear in the party that Conservatives, threatened by the strongly patriotic Ukip, would go into the election painted with a strong streak of English nationalism and promising extra powers for English MPs.

MPs believe the so-called West Lothian question – why Scottish MPs have the right to vote on English-only issues – would have to be be answered at last if there is further handing over of tax and spending powers to the Scots.

However, the division of legislation into bills that cover the whole UK and those that relate to a single country is widely acknowledged to be very difficult, with only a small minority of laws that specifically relate to English issues.

The coalition attempted to deal with the thorny question of a perceived democratic deficit for the English by setting up the McKay Commission on the consequences of devolution for the House of Commons. This found in early 2013 that English MPs should get more say over English-only issues, without banning Scottish MPs from voting on any legislation.

However, the report appears to have been shelved for the last 18 months and the government has not even offered a formal response.

Sir William McKay, a former clerk of the Commons who led the inquiry, told the Guardian: "The key thing is in the event of a no vote," he said. "One of the solutions is that the House could undertake to give a greater say for English MPs. It is about getting a balance."