LONDON Britain is likely to warn Scots that they cannot have a currency union with the rest of the United Kingdom if they vote for independence in a September referendum, local media reported, citing unidentified government sources.
The pro-independence Scottish National Party wants to keep the pound if there is a 'yes' vote in the September 18 referendum but finance minister George Osborne is likely to reject a currency union, the BBC and the Guardian reported.
Osborne's intervention in the currency debate will be echoed by Ed Balls, the Labour party's finance spokesman, and by Danny Alexander, the Liberal Democrat finance chief, local media reported.
A spokesman for the Treasury said he was unable to immediately comment on the reports.
Osborne has previously said the rest of the United Kingdom might be unwilling to let Scotland keep the pound while Bank of England chief Mark Carney has said a currency union would mean Scotland having to surrender some sovereignty.
Prime Minister David Cameron says that a vote to break Scotland 307-year-old union with England would undermine Britain's global clout and imperil its financial and political stability.
Polls show that Scots' biggest concern about possible secession is the impact it might have on the economy.
The Scottish National Party, which runs Scotland's devolved government, has made clear that it sees the creation of a currency union with the rest of the United Kingdom as central to its vision of an independent Scotland.
Alternative options such as joining the euro zone or creating a new currency are seen as more expensive and potentially riskier.
The SNP has said it might not accept its share of UK debt if it is not allowed to use the pound in a currency union.
(Reporting by Kate Holton and William Schomberg, editing by Guy Faulconbridge.)