NICOLA STURGEON has ruled out adopting any Plan B for the currency of an independent Scotland following George Osborne's dramatic intervention in the debate.
The Deputy First Minister, in a speech at University College London last night, said the Scottish Government would continue to argue for a sterling-zone with the UK - despite that option being ruled out by all three main pro-Union parties at Westminster.
Ms Sturgeon said that Scottish ministers had concluded that a currency union would be best for an independent Scotland and for rest of the UK.
She said: "That is a position we are going to continue to argue because we think it is the right one."
She also predicted that Scottish voters would make their own judgment on the merits of a currency union when they vote in the independence referendum.
She said: "Ultimately people will make their own judgement and vote in September, but we think it is right for Scotland and we believe it is right for the rest of the UK."
She reiterated that Scots could not be prepared to pay debt that was not "legally theirs" without a share of assets like currency.
Earlier, in an interview with The Herald, Ms Sturgeon also predicted that businesses, including Scotland's major banks, would force George Osborne into a change of heart on currency after a Yes vote.
She said: "I'm pretty sure that George Osborne will have a queue of businesses outside his door saying 'for goodness sake you are not planning to get us into a separate currency, that will cost us a fortune'."
She also accused the pro-Union parties of ruling out a sterling-zone because of recent opinion polls, saying she believed yesterday's push on the issue was "because the polls are narrowing".
She added: "I also strongly believe that what is said in the heat of the campaign changes and that common sense prevails after that campaign is over."
She also suggested that the intervention by the Conservative Chancellor would backfire.
She said: "If you were going to send someone to Scotland to bully and intimidate I would have thought the last person you would want to send is George Osborne, who is seen by many as the architect of austerity and many if the welfare changes that are hitting the vulnerable so hard right now."
The sight was "not one that was likely to go down well in Scotland", she predicted.
During her speech she had suggested to the English that if they truly loved Scotland they should set it free.
Her remarks came days after David Cameron declared his love for the UK as it stands and Tory MP Rory Stewart said his message to Scotland was: "I love you."
Scotland could be a "progressive beacon" for other parts of the UK, she told the audience.
"The rest of the UK has nothing to fear ... and much to gain from Scotland becoming independent. I also believe that independence will create a healthier relationship between Scotland and the other nations of our islands," she added.
The Deputy First Minister is also understood to be speaking in Cardiff in coming weeks and said she was open to spreading her message, that "we will always be more than good neighbours. We are allies, friends, family", across the whole of the UK.
Asked by a member of the audience about the lingering fallout from the Quebec independence referendums she also said that she hoped September's vote would pass off "without any lingering sense of resentment".
She also appeared to suggest that the Spanish government should accept the right of the Catalonian people to decide on potential independence.
The Catalan government has announced plans to hold its own vote just a few months after Scotland, but the move has gone down badly in Madrid.
"The decision about whether or not Catalonia should become independent is for the Catalonians to take," Ms Sturgeon said.
She also praised the Edinburgh Agreement between London and Edinburgh as a "model of constitutional democracy".