Income tax in Scotland will remain in line with the rest of the UK after MSPs at Holyrood voted to set the new Scottish rate for the levy for the first time.

Both Labour and the Liberal Democrats in Scotland have been calling for the rate to be increased by 1p, saying such a move would raise almost £500 million for education and local services.

But MSPs backed Deputy First Minister John Swinney's proposal for the Scottish rate to be set at 10p in the pound for 2016-17, keeping income tax the same on both sides of the border.

Under changes brought in as part of the 2012 Scotland Act, ministers at Holyrood are required to set a Scottish rate of income tax, which will come into place on April 6.

Income tax will be reduced by 10p in the pound for Scottish taxpayers but they will then have to pay the new Scottish rate.

Mr Swinney said: "I am asking on this historic occasion the Scottish Parliament to agree a Scottish rate of income tax of 10p.

"In short Scottish tax payers will see no increase in their income tax next year. That is the right decision. It is a decision that takes into account the challenges that are faced by members of the public."

MSPs backed this by 74 votes to 35

The powers currently available to MSPs would require any income tax rise to be applied at the same rate across all bands.

This would have a "disproportionate burden on the income of low income households", Mr Swinney said, adding: " I am not prepared to do that."

He said plans from Liberals and Labour for a 1p rise would penalise poorer families, adding that the Labour Party had "serious questions" to answer about plans for a £100 rebate for those on a low income.

The Deputy First Minister insisted: "It is crystal clear that when it comes to the taxation of newly qualified nurses, or newly qualified teachers, or police officers, or firefighters or office workers, or bus drivers or shop workers, it is not the wealthy that Labour is targeting, Labour is targeting working people busting a gut to make ends meet. This Government will not punish those individuals.

"This Government is on the side of working people, supporting them in their efforts to make ends meet. We will not increase their taxes, we will invest in public services and protect household incomes."

Labour public services spokeswoman Jacke Baillie said the income tax powers meant "real financial responsibility has come to this Parliament", adding that these brought "real choices that speak to who we are and what we value".

She told MSPs: "We have a choice, we can choose to use our powers to end Tory austerity and invest in our country's future or we can choose to do nothing and preside over hundreds of millions of pounds of cuts. So we choose to use our powers.

"This is something Nicola Sturgeon used to believe in. She used to say more powers meant fewer cuts, but now her SNP Government will vote with the Tories to continue the cuts."

She hit out at Mr Swinney and said: "For someone on a six figure salary to tell low paid workers he's protecting their incomes when he's really protecting his own is just wrong."

Scottish Lib Dem leader Willie Rennie also attacked Mr Swinney for failing to use the powers to increase income tax.

He told the Deputy First Minister: "We've actually got a very historic moment here.

"We've got an urgent financial situation. Does he feel embarrassed he's not seizing the opportunity to put 1p on income tax to invest in education?"

Scottish Conservatives backed keeping income tax unchanged, with finance spokesman Gavin Brown telling MSPs the SNP were in a "new taxpayers' alliance with the Conservative Party" in not raising taxes.

"We believe firmly the correct decision is to keep tax the same," he said.