INDEPENDENCE presents significant risks to the economic prospects for Scotland's biggest city, according to a council report due to be published next week.

The study, seen by The Herald, warns uncertainty over the currency of an independent Scotland could cost investment and jobs in Glasgow's growing financial services sector.

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It also claims the city could lose out to competitors south of the Border as a result of the Scottish Government's failure to promise cities more powers to develop their economies under independence.

The report, by Glasgow's chief executive George Black, was circulated among senior councillors yesterday as First Minister Alex Salmond visited the city to stage a youth cabinet event, where more than 100 young people from across the country quizzed ministers about independence.

Mr Salmond said independence would give young Scots the opportunity of a lifetime.

The Glasgow City Council report said: "The future currency is now an emerging area of significant uncertainty that requires to be addressed and one that may not be resolved in the short term."

It also said there was a significant risk the city would lose jobs and businesses to English cities if the UK's city deals, which hand authorities' greater powers in return for meeting economic targets, were not matched under independence.

The report said the council could face higher borrowing costs as a result of the UK-wide Public Works Loans Board, which lends at below market rates, being replaced by a Scottish-only body.

It also raised concerns about the future of pensions, with nearly 92,000 Glasgwegians in receipt of the state pension.

Councillors at the Labour-dominated authority will discuss the report next Thursday when they are expected to demand further information from the Scottish Government on a range of issues, including possible alternatives to the SNP's plan to share the pound in a formal currency union with the rest of the UK.

Councillor Gordon Matheson, leader of Glasgow City Council, said: "How can we run a city when we can't even say what the currency is going to be? The regeneration of Glasgow has been hard won. We can't sit back and watch that put at risk by constitutional turmoil. The rest of the world recognises city regions are the powerhouses of the economy, while in Scotland our Government is obsessing with nation-building. The White Paper doesn't even mention cities."

The report follows a council study last September which said independence posed a risk to 64,000 city jobs in tourism, finance, shipbuilding, the civil service and broadcasting. It was dismissed as bizarre by the SNP opposition.

A Scottish Government spokeswoman said pensions would be protected in an independent Scotland and added: "Our cities are key drivers of economic growth, and it's important to celebrate the contribution they make, as well as encourage future investment with the aim of creating sustainable economic growth."

Meanwhile, Mr Salmond was joined by cabinet colleagues at the SECC in Glasgow to answer questions from young Scots. He used the event to launch a youth version of the Scottish Government's independent White Paper, Scotland's Future.

The First Minister said: "The case for independence rests on the talent and ability of our people. In an independent Scotland your future - Scotland's future - will be in the hands of our young people."