Gordon Brown has told the BBC he backs a review of the powers of the Scottish Parliament, including taxation policy.
Speaking to BBC Scotland's The Politics Show, Mr Brown said there was a "very strong case" for a review after 10 years of devolution.
He said changes to tax-raising powers for the Holyrood parliament would be part of the review.
Mr Brown also said that the review was not a "one-way street" and some powers could be returned to Westminster.
He pointed to last summer's terror attacks and the foot-and-mouth outbreak, saying that UK-wide solutions were necessary.
Mr Brown gave his backing to Scottish Labour leader Wendy Alexander.
He said he supported her both in her leadership role and in her plans for a fresh study of the devolved settlement.
Mr Brown said she was "doing a very good job in difficult circumstances... after the Scottish Parliament elections" last May, when Labour lost to the Scottish National Party.
Ms Alexander faced calls to resign after her Scottish Labour leadership campaign accepted an illegal donation.
The Electoral Commission ruled Ms Alexander did not take all reasonable steps to comply with the law, but found she had taken "significant" steps.
The watchdog said it was "not in the public interest" to report to the Crown Office or Procurator Fiscal Service on the issue of whether accepting the donation was an offence.
It also ruled there was no evidence to establish that Ms Alexander's campaign team had sought to conceal or give false information surrounding the cash.
The Scottish National Party said her leadership has been undermined by the investigation.
Backing her plans for a fresh study of devolution, Mr Brown said: "There is an issue about the financial responsibility of an executive or an administration that has £30bn to spend but doesn't have any responsibility for raising [that].
"In any other devolved administration in the world, there is usually a financial responsibility that requires not only the spending of money by the administration but also its responsibility to take seriously how it raises money."
Mr Brown added: "Now the question is, just as local government has to raise some of its money through council tax, just as many other areas in the world where there are devolved administrations have to raise money through assigned taxation, is there a case for doing so?"
The SNP's deputy leader Nicola Sturgeon said Mr Brown's backing for the review of devolution was a "remarkable turnaround".
She said: "A year ago Gordon Brown was implacably opposed to the idea of any more powers for the Scottish Parliament.
"So I suppose it is another tribute to the progress that Scotland is making with an SNP government that Gordon Brown now agrees with the vast majority of people in Scotland that there should be more powers."
She added that Ms Alexander should "feel queasy" that the prime minister was taking control of the review.
Ms Sturgeon said: "Wendy Alexander's Scottish Commission has become a Westminster review and already we have talk of powers going back from the Scottish Parliament to Westminster."
She added: "If what Gordon Brown is talking about is less than full financial independence for the Scottish Parliament then what we might have is a trojan Horse for cutting the budget of the Scottish Parliament."