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And senior officials also warn that high costs and the potential conflict between English and Scottish trust law are just some of the issues facing the Treasury’s major project review group’s December panel meeting at which the proposals for the Personal Accounts Delivery Authority successor body will be finalised.

Under existing plans, staff enrolled in personal accounts by their employers are set to have the government pay 20 per cent – the current basic tax rate – of the 5 per cent of their income going into the scheme, 1 per cent in total.

The department for work and pensions’ December 2006 white paper on the subject stated: “All eligible employees will be automatically enrolled into either a personal account or an employer-sponsored scheme.

“Employees will contribute a minimum of 4 per cent, matched by a minimum 3 per cent employer contribution and around 1 per cent in the form of normal tax relief from the state.”

But the devolved government in Scotland has the power to adjust the basic rate up or down, which would see different amounts being paid to Scottish and non-Scottish members.

And it has raised questions over whether the cost of the scheme would be forced up if the Scottish Parliament raised this rate - a 2 per cent increase in the basic rate would commit the government to paying 10 per cent more for each employee.

Alternatively, a reduction in income tax could simply cost employees savings, or the government would have to come up with the cash to compensate them.

An administrative burden would also be created by running a two-tier tax system, with necessary assessments of who should receive which levels of relief.

And the sums involved could rise further if employees opt to up their savings beyond the minimum required, which would commit the government to further tax relief.

Liz Hinchliffe, pensions technical manager for law firm Pinsent Mason’s Edinburgh office, claimed a change in the basic rate of Scottish income tax could prove “extremely costly” to the government. She said: “If they ever chose to do it the administrative costs alone would be huge. They would have to set out some definition of residency.

“You could have Scottish people living and working in England, or non-Scottish people enrolled in personal accounts by Scottish employers and there would have to be some system in place for deciding who gets what tax relief.

“It would not just be personal accounts affected by this but all schemes with relief on the basic tax rate, but the point is that for them there would be additional expenses that I suspect have not been factored into the budget constructed for the scheme.

“And would it be reasonable to have such complications going back to the target market for personal accounts that are likely to be people liable only to basic rate tax”

The DWP and Personal Accounts Delivery Authority were unable to comment on the issue.

Speaking on condition of anonymity a Norwich Union pensions expert said: “This would be a huge problem for all pensions schemes which receive this tax relief but for personal accounts it would be an absolute nightmare. It would all fall over – there are just too many people involved.

“We think it would be an absolutely bad idea for the Scottish government to introduce a change in income tax.”