David Cameron has delivered an emphatic message to Scots that extra powers being granted by Westminster will represent the end of the road for devolution.

“This is the right resting place,” he said today, after championing the UK Government’s blueprint for more devolution as it was published in Edinburgh.

The Prime Minister also took a swipe at Nicola Sturgeon’s SNP Government at Holyrood, which spent the day complaining that the Coalition had “watered down” its original promise to deliver Home Rule for Scotland.

Mr Cameron told Scotland’s First Minister that it was time to stop debating which powers should come to Scotland and start using them to improve the lives of the people.

The Prime Minister came to Scotland with Alistair Carmichael, the Scottish Secretary, and Danny Alexander, the Chief Secretary to the Treasury, to unveil the draft legislation which will hand sweeping new powers to the Scottish Parliament over the next two years.

The decision to give Holyrood new powers – including control over substantial parts of income tax as well as power over some welfare policies, air passenger duty and fracking – were agreed by all the main parties soon after the referendum last year.

Mr Cameron insisted that yesterday’s move would fulfil the controversial “vow” to give Scotland Home Rule which the three main parties signed up on the eve of the referendum, a move which many Nationalists still think cost them the referendum.

The Prime Minister declared: “This is absolutely the vow fulfilled with every dot and comma in place.” He added: “Scotland spoke, we listened and here we are delivering. Now it is time for all of us to move on to the next great debate – not what the powers should be, but how they should actually be used. We need a battle of ideas about the economy, about jobs, about schools and hospitals, about the future of a great country making the most of every opportunity in front of it.”

Mr Cameron claimed the changes would create “the best of both worlds”: a strong Scottish Parliament with the security of the UK. But he also said that the process of Scottish devolution, which started with the creation of the Scottish Parliament in 1999 and continued through the Scotland Act in 2012, would end with these new powers. “From my point of view, this is the right resting place because we have got a very strong Scottish Parliament – raising the majority of its revenue, more powers than most other devolved parliaments in the developed world,” Mr Cameron said.

“I certainly don’t want to spend the five years debating, ‘Is that the right balance of powers?’ I want to spend the next five years debating how together we make the Scottish economy stronger; make opportunity more equal in Scotland.

“We should talk about how the powers are going to be used, talk about the things that people really care about, what happens in our schools and hospitals and our apprenticeships and opportunities. So, we have reached the resting place.”

Ms Sturgeon reacted to the Prime Minister’s announcement by arguing that Westminster had backtracked on the “vow” made for sweeping new powers for Holyrood.

She warned that the Coalition had written a veto into the new legislation which would prevent Scottish ministers from abolishing the so-called bedroom tax without the approval of UK ministers.

“Too much of what the Prime Minister has set out imposes restrictions on the recommended devolved powers and would hand a veto to UK ministers in key areas,” she said. “For example, the proposals on welfare do not allow us to vary Universal Credit without the permission of the UK Government. That means – under the current proposals – we will not have the independence to take action to abolish the bedroom tax.”

“In these crucial areas the clauses set out today appear to be a significant watering down of what was promised by the Smith Commission and need an urgent rethink by the UK Government.”

Mr Cameron said later he could “absolutely guarantee there is no veto”, while both Mr Carmichael and Mr Alexander dismissed Ms Sturgeon’s claims. The Scottish Secretary said both governments should learn to iron out their differences within a process of “mature collaboration”.

Meanwhile, Jim Murphy, the Scottish Labour leader, called for more power to be devolved locally. “I would like to see local communities and our cities have the ability to introduce new social security benefits to help people to get back into work,” he said.

The draft legislation: How far devolution goes

The constitution

The Scottish Parliament will be set in law as a permanent institution, controlling its elections, the number of MSPs elected and the franchise – which is to be lowered to 16.

Income tax

The Scottish Parliament will get power over income-tax rates and thresholds. The rate of the personal allowance and the taxation of savings and dividend income will remain reserved to Westminster.

VAT

The Scottish Parliament will keep half of the VAT receipts collected in Scotland.

Air Passenger Duty

The Scottish Parliament will get control over air passenger duty in Scotland, which will allow Scottish ministers to reduce APD for passengers flying from Scottish airports, if they so wish.

Welfare

For the first time, limited aspects of welfare are to be devolved to Scotland. This will allow Scottish ministers to change or abolish the so-called bedroom tax and alter other payments round the edges, but not change the overall welfare policy.

Benefits

The Scottish Parliament will be given control over carers’ benefits, attendance allowance, benefits for the disabled, industrial injuries allowance and cold‑weather payments.

The BBC

The Scottish Government will be given a formal, consultative role over the BBC’s Charter, and Scottish Parliament committees will be able to question BBC executives about BBC matters in Scotland.

The Crown Estate

All the money raised by the Crown Estate in Scotland will be transferred to the Scottish Parliament.

Consumer issues

The Scottish Parliament will have the ability to legislate against payday-loan shops and against fixed-odds betting terminals.

Transport

Public sector bodies in Scotland will be able to bid for rail franchises in Scotland; the Scottish Parliament will be given almost complete control over road-speed limits and road signs.

Fracking