NOTHING would be ruled out in negotiations between the government of an independent Scotland and Westminster in the event of a Yes vote, Defence Secretary Philip Hammond has insisted.
His comments are at odds with those of fellow Tory, Scottish Secretary David Mundell, who last week said there would be no negotiations on Trident after a Yes vote as the SNP's policy on getting rid of nuclear weapons was steadfast.
Supporters of independence are likely to seize on Mr Hammond's comments as further evidence that the Coalition's hardline position on blocking an independent Scotland from entering a currency union with the UK is not sustainable.
However, UK Government advisers later insisted its position on currency union had not changed and it was not something open for discussion.
Mr Hammond believes Scots will reject independence in favour of the "extraordinarily successful story" that is the United Kingdom.
But, in the event of a Yes vote, he said: "You can't go into any negotiation with things that are non-negotiable. You can go with things you intend to make your principal objectives in a negotiation and, when you have issues about which you are not prepared to be flexible, invariably you have to give way on other things in order to achieve your objectives."
Asked if any issue could be treated in isolation, Mr Hammond replied: "No. It's all in. There will be nothing non-negotiable. Everything will be on the table."
Despite an unnamed minister's views to the contrary, the UK Government has been adamant one of the isues it will not to be flexible on is sharing sterling with an independent Scotland.
Last month, Mr Hammond forcefully reiterated the Coalition view, saying: "The reasons why we couldn't have a currency union between the rest of the UK and Scotland are not political; it's not
because there would be bad blood. It's because there are sound economic reasons why a currency union without deep fiscal and political union doesn't work."
The Secretary of State, speaking ahead of a keynote speech in Glasgow tomorrow, also dismisses Mr Salmond's adopted Independence Day.
During the SNP leader's conference speech on Saturday, he again insisted Scotland would become independent in March 2016, with talks between governments starting within days of a Yes vote on September 18.
But stressing there would be a "complex set of negotiations" to be gone through, which meant the 18-month time-scale was uncertain, the Defence Secretary rejects the FM's declared Independence Day as "an arbitrary date; it has no significance.".
He stresses: "The UK Government is very clear that if the Scottish people express the will to go down this route, then we will engage with them and negotiate with them in good faith.
"But it does not mean we roll over and say take what you want: there has got to be a negotiation, there's got to be a fair conclusion and a fair settlement. How long that will take depends on the negotiating stance of the other side."
He adds: "My experience of negotiating things is that if you decide you have got to get the negotiations concluded by a certain date, you can always do it but you end up giving things away. No one sensible would ever enter a negotiation saying: 'I have to have this deal done by X date.'"
Mr Hammond also says:
l A No vote would lead to more tax powers for Holyrood;
l Scotland has benefited "disproportionately" from the UK's economic recovery;
l Removing nuclear weapons from Scotland will not take up to five years as the SNP promises, but 10 years;
l Scotland, far from being short-changed in defence terms as claimed by the SNP Government, has had its position "protected and enhanced" with more military staff at the end of the basing review than at the beginning;
l David Cameron would not resign as Prime Minister if he lost the Union.