THE director general of the ­Confederation of British Industry has claimed that the case for Scottish independence does not stack up and the best way to retain jobs and prosperity is within the Union.

John Cridland's comments provoked a strong response from the Scottish Government on a day when the Cabinet met in Irvine, North Ayrshire.

It coincided with a string of investment announcements amounting to £9 million, mainly through the expansion of oil and gas service company Howco Group.

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First Minister Alex Salmond said: "Regeneration isn't just about businesses, it's about people and places, creating communities we can be proud of, where people want to live, work and invest in."

However, Mr Cridland said: "The minute you draw a line between Gretna and Berwick, Scotland starts to drift apart from its biggest market and loses a significant amount of economic clout.

"The economic plan outlined in the White Paper does not add up. It ignores the need for deficit reduction, instead promising more unfunded spending.

"On the key issues that are critical to jobs and growth, the White Paper's lack of clarity runs the risk of jeopardising an independent Scotland's future success.

"Scotland's economy is a real success story as part of the UK - it has the independence and flexibility of devolution alongside the support of the Union."

He added: "The fate of Scotland is, of course, a decision for the Scottish people, but business is clear - we are stronger together."

Deputy First Minister Nicola Sturgeon was scathing of the claims and said: "The CBI opposed devolution using many similar arguments, which have since been proven to be completely and comprehensively wrong.

"Unfortunately, this paper misrepresents the realities of independence in several key respects - an independent Scotland will still enjoy barrier-free trade with the rest of the UK and the only serious threat to our membership of the EU is Westminster's proposed in-out referendum."