IT wouldn't be a Scottish Labour Party conference without a crisis of one sort or another and, in accordance with that proud tradition, comrades have packed their latest package of fraternal grievances and brought it with them to Inverness.

The issue at stake is the party's plan to hand Holyrood full control over income tax, as The Herald reported on Thursday.

The proposal, from Scottish Labour's internal devolution commission, has gone down badly – very badly, it's fair to say – with many MPs.

On the face of it, that seems a little odd as MPs were heavily represented on the panel, not least by Anas Sarwar, Scottish Labour's deputy leader and the man whose job it is to liaise and generally smooth relations between Westminster and Holyrood. But even his considerable powers of diplomacy have failed to overcome the extreme distrust felt by many (but not all) MPs about further devolution.

MPs have some legitimate concerns. They are worried that making Holyrood responsible for raising half the cash it spends – the broad effect of the income tax transfer – would undermine the Barnett formula, which English and Welsh MPs have long viewed as an over-generous mechanism for allocating cash to Scotland.

They are also fearful that greater devolution would re-open calls to cut the number of Scottish MPs at Westminster.

The devolution commission was alive to those arguments and said Labour should not press ahead with the income tax plan if it threatened Scotland's balance sheet or representation (though now the cat is out of the bag, it's hard to see how Johann Lamont could back-track without suffering serious political damage).

The gripes run even deeper for many MPs, however, and what is really behind the turmoil in Inverness is this: their instinctive resistance to anything that might be seen as a concession to the SNP. When that "concession" is being driven by their hopeless Holyrood cousins, the bunch who let the Nats win two Scottish elections on the bounce, well, the resistance is all the stronger.

MSPs (and, to be fair, at least a healthy smattering of MPs) know this and sum up the attitude in two words: Jurassic Park.

By and large Labour's MSPs are more enthusiastic about devolution and most see the merit in making a future Scottish Government, of whatever colour, more accountable for the money it spends.

But even those who glumly feel they are playing into Alex Salmond's hands are aware of the political need to develop devolution.

For a start, they are much less complacent about the independence referendum than their Westminster colleagues, many of whom believe victory, and a crushing one at that, is in the bag.

The concern among thoughtful MSPs and MPs is that far from destroying the SNP, the referendum will be closer than the polls are indicating right now, and a narrow defeat for independence might leave Alex Salmond in quite a strong position.

He would surely argue that a No vote gave Westminster a green light to ignore Scotland or worse, and Scots needed the SNP more than ever. If Mr Salmond also picked up something of a post-No sympathy vote in the 2015 Westminster and 2016 Holyrood elections, the Nationalists could do well, even taking Westminster seats from Labour the year after the referendum.

With Ed Miliband struggling to build a commanding lead over the Conservatives every last seat will count. Coalitions deals with the Liberal Democrats and even the Nationalists have not been discounted to get the Labour leader into Downing Street.

Against that background, plans to devolve income tax are about putting Labour where it believes the voters are – and the polls consistently show Scots like the idea of a beefed-up Holyrood.

With the LibDems and the Conservatives also offering more powers, Ms Lamont is convinced she cannot afford to be backward about what strategists call the "forward offer".