The Scottish Government has said a currency union would be in the interests of Scotland and the UK in the event of Scottish independence, while Unionists say it would not work.
Deputy First Minister Nicola Sturgeon said that as Scotland represents the second biggest export market for the rest of the UK after the US, it would not be in the interests of Westminster “to force its businesses into a separate currency” when Scotland wants to retain the pound.
But Scottish Secretary Alistair Carmichael said a currency union “wouldn’t work” and would give Scotland less control over interest rates.
Former chancellor and leader of the Better Together campaign Alistair Darling meanwhile raised the prospect of Scotland joining the euro.
The comments came before the Scottish Government publishes its much-anticipated white paper or independence “blueprint” tomorrow.
Asked if Westminster would refuse to allow the Scots to use the pound, Mr Carmichael said: “Public international law is very clear on this, that if you remove yourself from the United Kingdom then you would remove yourself from all sorts of institutions and, yes, the pound would be one of them.”
Mr Darling said a currency union was looking like a “non-starter”.
The independence referendum will take place on September 18 next year.
Ms Sturgeon said: “We will be in a currency union because it’s in the best interests of Scotland and the best interests of the UK.”