THE SNP Government's currency plan for an independent Scotland will move centre stage this week when First Minister Alex Salmond holds talks with the governor of the Bank of England.
Salmond is expected to use his private meeting with Sir Mervyn King, who has remained tight-lipped on independence, to explain his vision of a sterling zone to the outgoing governor.
A key plank of the SNP's independence proposal is for the Scottish state to share the pound with the rest of the UK. Salmond has also backed a UK-wide fiscal stability pact and believes financial services should be regulated by one authority across Britain.
The currency plan was endorsed by the Scottish Government's Fiscal Commission, but the UK Treasury has dismissed the policy.
The proposal has its critics in the Yes movement. Yes Scotland chair Dennis Canavan said a separate Scottish currency would give the country "more flexibility".
The Bank of England, which would be expected to set interest rates across the UK post-independence, has yet to enter the debate.
The bank has exchanged basic information with the Scottish Government, but has not made any formal statements on the issue.
Asked last year about the bank being the lender of last resort to an independent Scotland, King kept it brief: "I don't want to say anything about that at the moment."
King may be less inhibited to talk about a sterling zone now he has only days left as governor.
The Sunday Herald understands Salmond will meet King on Thursday. A source said the pair had a "good working relationship".
By contrast, King had a difficult relationship with Better Together chair Alistair Darling when the Labour MP was chancellor.
Darling said the governor could be "stubborn" and "exasperating".
King, who has been governor since 2003, will leave office at the end of this month. He will be replaced by Mark Carney.
A spokesman for Salmond said: "The First Minister is very much looking forward to welcoming Sir Mervyn to Edinburgh. It was Sir Mervyn who agreed to the technical discussions which have already taken place between the Bank of England and the Fiscal Commission, and Mr Salmond is pleased he is now coming to Scotland as part of his farewell tour before stepping down as governor."
A spokesman for Better Together said: "It is nice of Alex Salmond to drop in to pay a visit to Mervyn King ahead of his retirement. The First Minister knows, though, that the operational independence of the Bank of England only extends to setting interest rates, not to doing deals on currency."
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