THE Smith Commission will this week pave the way for 16 and 17-year-olds to vote in all Holyrood elections, possibly even the next one in 2016, party insiders have indicated.

A source close to the constitutional body, chaired by crossbench peer Lord Smith of Kelvin, stressed there was a "broad political consensus" for extending the franchise following the independence referendum, when more than 100,000 16 and 17-year-olds registered to vote.

One Labour insider made it clear a key commission proposal would be that "everything to do with the running of Holyrood will be handed over to Holyrood", including franchise, elections and length of parliamentary term.

However, the question is whether the Scotland Bill transferring more powers from Westminster to Holyrood can be enacted in time to enable the franchise to be extended for the May 2016 poll.

One senior Whitehall source made it clear that if it could not, then it was possible the commission could recommend a special parliamentary procedure - a Section 30 Order, which was used to allow the Scots Parliament to organise the independence referendum - be passed by MPs to enable Scotland's youngsters to vote in the next Holyrood election.

The five political parties engaged in the commission support extending the voting franchise. Ruth Davidson, the Scottish Conservative leader, who was opposed to the extension, has changed her mind, given the enthusiastic engagement by teenagers in the referendum.

More than 80 per cent of 16 and 17-year-olds who were eligible registered to vote for the September 18 poll with the vast majority taking part; one survey suggested 70 per cent had voted Yes.

The Scottish Youth Charities, ­representing 1.1 million young people, have urged the commission to extend the franchise, believing young people must continue to fully engage in the democratic process.

Lord Smith will make the ­announcement of the commission's proposals in Edinburgh on Thursday. There is a great deal of political sensitivity around it, with no party leadership wishing to say anything that undermines the process.

The commission has refused to comment on the details of its deliberations, but there have already been unconfirmed reports it will recommend all power over income tax should be devolved; this would go counter to the view of some Labour politicians, including Gordon Brown - said to be poised to announce he will stand down as an MP at the May election -- who has described full fiscal autonomy as a "Tory trap" that would lead to the break-up of Britain.

It is thought there will be agreement on transferring some elements of welfare policy to Holyrood, such as housing benefit, as well as, say, policy on abortion.

Former chancellor Alistair Darling said the devolution of income tax would weaken the ties that bind the UK's member nations. "It seems the entire principle of pooling and sharing risks, one of the strengths of the UK and all successful monetary unions, is being undermined," he wrote in the Financial Times. "If we get this right, it can work well. If we get it wrong, it could end up in floods of tears."

Yesterday, Scottish Secretary Alistair Carmichael was plain the commission would deliver on the UK parties' vow of more extensive powers for Scotland and expose the SNP cry of betrayal for "the nonsense that it is".

He told the nationalists that their fixation with a "neverendum" could create business uncertainty and lose Scotland thousands of jobs, citing the example of the financial services industry in Quebec.

His comments come after Alex Salmond, the former first minister, put forward the notion that many Scots regarded the result of the September 18 poll as "not so much No, but not yet" while veteran SNP MSP Sandra White at the weekend predicted there would be a second independence referendum in 2017.

Margaret Curran, Mr Carmichael's Labour shadow, who stressed her party was engaging with the commission and would "deliver on the vow", also warned the nationalists they would be "playing with fire" in terms of the Scottish voters if they rejected the result of the September poll.

Angus Robertson, the SNP leader at Westminster, said it was "ridiculous" for Mr Carmichael to talk about business uncertainty when his party, in coalition with the Tories, was causing huge uncertainty "through their plans for an in/out referendum on EU membership".

Some Labour MPs believe that, for political reasons, the SNP will pull out of the commission process - a charge denied by the nationalists.

Mr Robertson added: "The SNP will continue to play a productive role in the Smith Commission in good faith and work to ensure it lives up to the expectations of people in Scotland for the 'extensive new powers' ­Scotland was promised by the Westminster parties in the No campaign."