Exclusive: A war of independence: PM squares up to Salmond

Cameron orders ministers to campaign aggressively north of the border against the break-up of the union as panic hits Westminster

David Cameron is to go head to head with Alex Salmond in a bitter battle over the future of the union between England and Scotland. The Government is to fight what it sees as "outrageous" claims and increasingly aggressive moves towards complete self-rule from the Scottish First Minister in a desperate attempt to stop Scotland from "sleepwalking into independence".

The Prime Minister has ordered an aggressive government attack on the SNP in the hope of raising the alarm in England and Scotland about the prospect of Scotland voting to split from the United Kingdom. He believes the First Minister has had an easy ride and not faced enough questions on how an independent Scotland would stay afloat – and bankroll its huge pensions and benefits bill without raising taxes.

The more "muscular" approach, agreed by the coalition's ruling "quad" of ministers, will target areas where Mr Salmond is seen to be vulnerable – notably on the economy and welfare.

The frantic switch follows widespread unrest among English MPs over the enhanced subsidies available to Scotland, which fund improved services including free personal care, university tuition and prescriptions, which are not available in England.

The gear change comes as Labour announces plans to beef up the position of its leader in Scotland, partly to face down the SNP resurgence.

One senior minister pledged yesterday that the Government would no longer be the "passive recipient" of proposals from the Scottish Executive, including the Budget presented by the SNP Finance Minister John Swinney last week.

Instead, coalition ministers including Mr Cameron and Nick Clegg will take on Mr Salmond in a series of visits and interviews in the coming months. Michael Moore, the Scotland Secretary, has already begun telling government departments to shape their pronouncements to spell out the advantages of the union to the Scottish public.

"We have all allowed Salmond to have it his own way for too long," one minister said yesterday.

The change in strategy betrays a growing frustration at the heart of Government that Mr Salmond has been allowed to dictate the debate over Scotland's destiny. His enduring popularity has made a vote for independence – or further devolution christened "devo max" – a real possibility at a referendum promised within the next four years.

The "quad" – Mr Cameron, the Deputy Prime Minister, Nick Clegg, the Chancellor, George Osborne, and the Chief Secretary to the Treasury, Danny Alexander – have rejected a more positive campaign in favour of an aggressive response targeting Mr Salmond himself.

After a series of meetings with Mr Moore, they have pulled in ministers from across the Government and told them to join the effort to counteract the SNP message.

Mr Moore warned last week that an independent Scotland would risk a Greece-style economic collapse. He added: "When the economy changes we have bigger bills to pay on unemployment. Scotland would have to think how on earth that was done."

Ministers concede that UK parties had given Mr Salmond a free rein to present himself as the defender of Scotland's rights over several years, culminating in the SNP's victory at the Scottish elections in June.

A senior Scottish Lib Dem minister confessed last week that the party had missed the chance to rein in the SNP by refusing to form a coalition government when the Nationalists emerged as the biggest party, but without a majority, following the 2007 Holyrood elections.

Instead, Mr Salmond used the result as a platform to establish his party as a credible government for four years, and then to win an outright majority at the elections held in May this year.

The strategy presents the Prime Minister with a difficult balancing act, however, as it requires him to defend a settlement which has provoked hostility on both sides of the border.

A group of young Tory MPs has now called on Mr Cameron to end Scotland's subsidy and give Holyrood greater tax-raising powers – effectively forcing the nation to pay its way within the union. The gap between public spending and taxes raised in Scotland stood at £14bn in 2009-10, and the country receives subsidies amounting to almost 20 per cent more per head than in England.

John Curtice, professor of politics at Strathclyde University, said the coalition parties had recognised the problem late, as the prospect of a referendum was remote. He added: "They are having difficulty putting forward their argument because no one can match up to Mr Salmond."

Nicola McEwen of the Institute of Governance at the University of Edinburgh said the Government "has a legitimacy problem in Scotland, being made up of the third and fourth-placed parties".

A spokesperson for Mr Salmond said yesterday: "Scotland's future will be decided by the people of Scotland – not by the Tory-Lib Dem 'quad' holding secret meetings in Downing Street.

"The people of Scotland have already spoken decisively this year, overwhelmingly backing the SNP government's positive vision of progress for the nation, and a recent poll shows independence has moved ahead of support for the status quo."