Stephen Flynn has reportedly suggested the SNP could back Labour after the next general election even if the party is not granted indyref2.
The party's Westminster leader had refused to rule out working with Labour if the SNP are not guaranteed a second referendum, but called for more powers for the Scottish Parliament.
This marks a softening of the party's stance as Flynn and First Minister Humza Yousaf have both previously said the SNP want the Scottish Parliament to have the power to hold an independence referendum as part of a deal with Labour.
Labour leader Keir Starmer has said that he will not work with the SNP as the parties have a "fundamental disagreement" of the future of the UK.
Flynn told The Scotsman that a second referendum would be an "extremely high priority" in potential negotiations with Labour.
He added that he would like more "meat on the bones" of devolution and that a Labour minority government would be a chance to "empower" the Scottish Parliament.
The SNP has previously called for the devolution of employment law, migration, energy and Scotland to be given access to the EU single market.
But Flynn tweeted afterwards: "As much as I admire the fourth estate, I’m not in the habit of hinting nor suggesting. Scotland’s future must rest in the hands of Holyrood, not Westminster.
"A hung Parliament offers us the chance to make that happen - and it goes without saying that it will be 'key' for us."
Some experts suggested Labour may not have enough support to win a majority at the next general election, although it is still likely to be the biggest party.
This led Flynn to claim that the SNP "will hold the balance of power" after the election.
But the SNP are also likely to lose seats. Labour are optimistic of gaining several constituencies from the SNP, particularly across the central belt.
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