A man wears 'Yes' campaign badges during a pro-independence march in
© AP

Alex Salmond has claimed the No campaign against Scottish independence is “holed below the waterline” as he sought to capitalise on weekend speculation that Westminster would permit a currency union after a Yes vote.

An unnamed cabinet minister told the Guardian newspaper on Saturday that the UK government would agree to share the pound with an independent Scotland, as part of a deal to keep the UK’s nuclear deterrent in Scotland, despite the chancellor’s assertions to the contrary.

George Osborne, the chancellor, and Danny Alexander, chief secretary to the Treasury, both issued strong denials over the weekend that this could ever be the case.

The Scottish first minister said in an interview with Sky News on Sunday: “The panicked reaction of the No campaign over the past 48 hours shows they know that their scaremongering has been holed below the waterline. The story is a very important demolition of the No campaign and its self-styled ‘Project Fear’ tactics.

“These revelations indicate that everything we have said about Westminster’s bluff and bluster on currency has been correct. George Osborne and Ed Balls joining hands and reiterating the scaremongering doesn’t deny the story.”

In a separate interview, Alistair Carmichael, UK secretary of state for Scotland, warned that pro-union campaigners should not take their opinion poll lead for granted, adding that the Yes campaign had a major funding advantage and would be able to “buy momentum” in the months before September’s referendum.

“It’s not impossible the nationalists could win,” he said. "We’ve got to get our campaign message as sharp as them.”

Mr Salmond denied knowing the identity of the cabinet minister responsible for the comments. The newspaper quoted the minister as saying: “Of course there would be a currency union.”

“Saying no to a currency union is obviously a vital part of the No campaign. But everything would change in the negotiations if there were a Yes vote.

“There would be a highly complex set of negotiations after a Yes vote, with many moving pieces. The UK wants to keep Trident nuclear weapons at Faslane and the Scottish government wants a currency union: you can see the outlines of a deal,” the minister said.

Mr Osborne and Mr Alexander restated their position that sharing the pound would not be in the interests of the UK or an independent Scotland.

“There will not be a currency union in the event of independence. The only way to keep the UK pound is to stay in the UK. Walking out of the UK means walking out of the UK pound,” the two Treasury ministers said.

“A currency union will not work because it would not be in Scotland’s interests and would not be in the UK’s interests.”

However, the Scottish National party seized on the report to support its claim that a post-independence currency union was possible.

Pro-union campaigners were engaged in a “desperate rearguard action”, tweeted Nicola Sturgeon, Scotland's deputy first minister. “The currency cat is well and truly out of the bag.”

Mr Salmond added that the Yes camp’s “positive message” was narrowing the pro-union lead.

“We believe that month-by-month, week-by-week, poll-by-poll, we are gaining ground,” Mr Salmond told Sky.

The idea that Scotland would not be able to share the pound has been a centrepiece of the pro-union campaign since the coalition parties and Labour ruled it out last month.

Opinion surveys suggest many in Scotland are of the view that the Westminster parties are bluffing over the currency. A poll for the Times found 45 per cent of Scottish voters believe the three parties will drop their resistance in the event of a Yes vote, compared with 40 per cent who do not.

That scepticism is part of the reason the currency threat has failed to boost support for the Better Together campaign, with polls suggesting the nationalists have gained ground since the assertion was made.

Additional reporting by Helen Warrell

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