A deal to head off a constitutional crisis over plans for a referendum on Scottish independence was emerging last night as the Conservatives, Labour and the Liberal Democrats joined forces to oppose the break-up of the United Kingdom. The Government may allow Alex Salmond, the First Minister and leader of the Scottish National Party (SNP), to hold a referendum on independence at his preferred time of autumn 2014 in exchange for a straight Yes or No question on the ballot paper.
Mr Salmond would be forced to drop his planned third option which would allow for the devolution of all powers, except foreign and defence policy, from London to Edinburgh. Known as "devo max", it is seen as an insurance policy if full independence is rejected by the Scottish people. In London, ministers said the devo max question was a "red line" they would not cross. They will insist on a ballot in which Scots would choose between independence and remaining in the Union, even if this means a protracted legal wrangle which may have to be resolved by the Supreme Court in London.
One government source said last night: "You can't have a 'maybe' on the ballot paper. It could be a recipe for chaos. What happens if 51 per cent of Scots vote for full independence but 71 per cent back more devolution?"
Although pro-Union politicians would prefer to see the referendum held next year to end the uncertainty about Scotland's future, ministers are ready to show flexibility over the date if Mr Salmond abandons the devo max option. Senior Labour and Liberal Democrat figures believe David Cameron was "inept" at the weekend in the way he demanded a vote "sooner or later", thereby allowing Mr Salmond to accuse London of trying to hijack the process.
Writing in The Independent today, the Scottish First Minister says: "Whatever people's views on independence, there is nothing more guaranteed to antagonise the average person in Scotland than a Tory Prime Minister lecturing the democratically elected Government of Scotland on how a fair referendum should be run."
However, Labour and Liberal Democrat sources say they are pleased Mr Cameron's move has finally sparked a debate about the merits of independence – and could force Mr Salmond to answer detailed questions about how Scotland would look. The Tories are deeply unpopular in Scotland and the Liberal Democrats lost support north of the border after entering the Coalition in 2010. Nick Clegg wants the anti-independence campaign to be led by a Labour figure such as Alistair Darling, the former Chancellor and MP for Edinburgh South-West.
Mr Darling said yesterday he was ready to "play my part" in the No campaign. However, he wants a cross-party campaign involving community and business leaders as well as politicians, and believes it must be led by people based in Scotland. He does not want a single figurehead to lead as this could make the battle a presidential campaign which plays into Mr Salmond's hands.
Mr Darling said: "The whole of the UK would be diminished if any one party left. I also think that as someone who is Scottish, it is not in my country's interest to cut itself adrift. I think it is important for the greater good of the country that we don't fall into the trap of this being a contest of Alex Salmond against London."
Sir Menzies Campbell, the former Liberal Democrat leader and MP for North-East Fife, is also likely to play a prominent role in the No camp. A veteran of the 1979 referendum on independence and the 1998 vote on devolution, he said he was ready to take a high-profile role if asked by his party. "Scotland is stronger within the Union and the Union is stronger with Scotland," he declared. However, he said that once the issue of independence was settled, he favoured the devolution of extra powers to the Scottish Parliament. He added: "I'm increasingly of the view that a whole new constitutional settlement will be required in due course."
The Prime Minister and the Labour leader, Ed Miliband, staged a rare show of unity in the Commons yesterday over the future of the Union, and Downing Street did not rule out the prospect of the two men appearing together on an anti-independence platform. Mr Cameron told MPs he passionately believed "we are stronger together than we would be by breaking apart", while Mr Miliband said pro-Union parties had to advance "the positive case about the shared benefits to us all of Scotland's part in the United Kingdom".
The Prime Minister is due to meet the First Minister in the next few weeks to discuss the logistics of the referendum. Yesterday, Mr Salmond stepped up his attack on the UK Government's intervention, telling Mr Cameron he should "butt out" of Scottish affairs.
The SNP is due to publish proposals for its 2014 poll by the end of the month. As well as the prospect of including a devo max option on the ballot paper, a further flashpoint with London is the suggestion that Scots aged 16 or 17 should be able to vote. The Government will hold a two-month consultation about how a referendum could be organised, but ministers – led by the Liberal Democrat Scottish Secretary, Michael Moore – are not waiting for it to end to start making the case against independence.
Q&A: The battle for Britain
Q. What is the UK Government's position?
It accepts the question of independence has to be put to Scots. But it is adamant the ballot should happen as soon as possible and only contain a simple Yes/No question. Initially Downing Street suggested it should happen within 18 months, although it withdrew the explicit deadline. But its preference remains for a 2013 referendum.
Q. What does Alex Salmond want?
He has set autumn 2014 for the poll and wants it to contain three choices: no change, full independence and greater devolution within the UK.
Q. Who decides what happens?
This is the crux of the controversy, threatening the UK with its gravest constitutional crisis for nearly a century. The UK Government asserts Holyrood is banned, under the 1998 Scotland Act, from passing any measure affecting the nation's constitutional status. Hence, it says, the result of such a poll would not be legally binding.
Q. How does the SNP respond?
It says the referendum's timing and content has to be fixed in Edinburgh and Salmond says there is "plenty of legal authority" to support his administration's plans to stage its own ballot.
Q. What happens next?
The UK Government is ready to give permission for a ballot if it takes place within a certain time and is limited to a Yes/No question. It has started a consultation.
Q. What if Salmond presses ahead anyway?
If Scotland backed independence, the result would inevitably be challenged – and the legal battle could go to the UK Supreme Court, based in London. Equally Salmond would claim moral victory – and it would be hard for London to ignore Scotland's will.