ALEX Salmond has ruled out using Trident as a bargaining chip in any negotiations over currency union in the event of a Yes vote, saying that it will never be up for negotiation.

The First Minister said "Project Fear" was "holed below the water line" after the admission by an unnamed UK minister that an independent Scotland would use sterling. "Their bluff has been called," added the First Minister.

Downing Street said the hunt was on to identify the minister who contradicted Chancellor George Osborne's insistence that sharing the currency had been ruled out. As it had been suggested maintaining Trident at Faslane might be a quid pro quo for agreeing a currency deal, Defence Secretary Philip Hammond felt compelled to stress he was not the source of the story.

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Mr Salmond said: "On the issue of Trident, our opposition to nuclear weapons is not a campaign tactic or a negotiating position - it is one of the reasons for Scotland being independent. The negotiations will take place about share of debt, not about things like Trident, which we are unambiguously opposed to."

Predicting the story would have a long-term impact, he said: "It has been a very difficult 48 hours for the No campaign and it's going to get a lot worse because they are not basing their arguments on a positive vision of the future."

However, Scottish Secretary Alistair Carmichael insisted: "I think most fair-minded observers will look at this and they will say on the one hand you have got an anonymous source speaking off the record, on the other hand, you have got the Governor of the Bank of England, and the very detailed advice of the permanent secretary to the Treasury to the Chancellor saying this is something we would not advise you to be part of."

Alistair Darling, head of Better Together said: "A currency union would not be good for Scotland or the rest of the UK. That's why it wouldn't happen, no matter what anonymous quotes people read."