Gordon Brown is reluctant to lower corporation tax in Northern Ireland because he fears repercussions in Scotland, Ian Paisley has said.
On Monday, Sir David Varney rejected demands for a cut in corporation tax in NI.
Mr Paisley, NI's first minister, said there were potential political implications for Labour in Scotland.
Executive ministers said they have not given up hope of achieving a cut in the rate of corporation tax.
However, they acknowledge they may have to pursue their arguments with a future Westminster government.
After a meeting of the Stormont Executive, Mr Paisley said: "I believe that the prime minister is afraid of Scotland, because Scotland has been the backbone of the labour movement and now the bowl is broken... for the first time Labour is no longer in charge of affairs in Scotland."
Finance Minister Peter Robinson also expressed his extreme disappointment at the outcome of Sir David Varney's review.
But he pointed out that Northern Ireland officials would play a bigger role in a second review of the economy to be undertaken by Sir David in the run up to a major investment conference next summer.