Salmond hits back as pound takes centre stage

Alex Salmond during First Minister's Questions at the Scottish Parliament yesterday (Reuters)

The Government could not stop an independent Scotland keeping the pound, Alex Salmond declared yesterday, as sterling moved to the heart of the heated debate about the union.

The SNP First Minister hit back at suggestions from ministers in London that Scotland might not be allowed to retain the pound and would have to commit to joining the euro as the price of joining the European Union.

Mr Salmond told the BBC's Politics Scotland programme: "The UK Government can't stop an independent Scotland using sterling. Sterling is not owned by George Osborne. Sterling is a fully convertible currency. He couldn't possibly instruct people not to use sterling." He added: "Our position is let's use sterling until we're able to take a decision on the euro."

UK ministers claim Mr Salmond's position is flawed because interest rates would continue to be set by the Bank of England.

They say that could leave a breakaway Scotland with less influence than it has now because the Bank would no longer have to take account of economic conditions north of the border when fixing interest rates.

David Cameron is to meet Mr Salmond shortly to discuss plans for a referendum on independence, it was announced last night. But Downing Street urged Mr Salmond to accept an invitation to meet Michael Moore, the Scottish Secretary, in Edinburgh on Thursday.

Support for Scottish independence is higher in England than Scotland, according to an ICM poll for The Sunday Telegraph. While 40 per cent of Scottish people back independence, 43 want to remain part of the UK.

In England, 43 per cent support independence and 32 per cent want to preserve the union.