NICOLA Sturgeon has repeated her threat to block Holyrood's new powers after a leading economist warned the deal could cost Scotland hundreds of millions of pounds.

Speaking during First Minister's Questions, she welcomed comments by Professor Anton Muscatelli, who said the financial deal underpinning the new Scotland Bill could "penalise" Holyrood.

Prof Muscatelli, the principal of Glasgow University, argued the so-called 'fiscal framework' was "arguably more important" than the package of new tax and welfare powers the legislation will devolve.

Writing in The Herald, he said: "The clear demand for more powers cannot come at any price."

His remarks followed a similar warning from the Scottish Trades Union Congress, which warned the new powers could become a "poisoned chalice" if the financial deal was unsatisfactory.

Ms Sturgeon said Professor Muscatelli and Grahame Smith, the general secretary of the STUC, were "credible, independent voices that should be listened to".

She told MSPs: "We will only support a legislative consent motion on the Scotland Bill if there is a satisfactory and fair fiscal framework agreed between the Scottish and UK governments.

"Nobody could reasonably expect any government to say anything else."

The Scotland Bill, which has passed through the House of Commons, will give Holyrood control over income tax and a £2.5billion welfare budget.

Talks over the fiscal framework are continuing.

The deal was due to have been concluded this autumn but the two governments have been unable to agree on the mechanism for cutting Scotland's budget when its new tax-raising powers come into force.

Although Westminster legislation, the Scotland Bill must be rubber-stamped at Holyrood.

If MSPs refuse, it would block the new powers indefinitely.