STAYING in the single market after Brexit is an “obvious democratic compromise” in a divided UK, Nicola Sturgeon has insisted.

The First Minister said the UK Government’s plans were “in a state of complete chaos”, with a “wilful denial of the complexity” of leaving the EU.

She reiterated calls for a distinctive immigration policy in Scotland, ensuring it remains “an inclusive, welcoming, outward-looking country”.

Addressing the David Hume Institute in Edinburgh, Ms Sturgeon said: “We are consistently told that the UK can have everything it wants – regulatory flexibility, the freedom to strike trade deals with other countries and the full benefits of the single market – despite abundant evidence to the contrary.

“2018 is the year when that rhetoric will finally meet reality. On every issue of substance so far where some decision has been taken – for example the timetable for talks, and settling the UK’s budget obligations – the UK Government has set out a completely unrealistic starting position, and then been forced to capitulate.”

Ms Sturgeon insisted the only sensible post Brexit position was continued membership of the single market and customs union.

She added: “The EU referendum gave no mandate for leaving the single market. So the idea that leaving the EU requires us to leave the single market and the customs union is simply an assertion of the Prime Minister’s – it is her interpretation of the referendum result, and nothing more.

“Given the closeness of the EU referendum result across the UK – and given that two out of four nations in the UK voted to stay in the EU – surely a soft Brexit, rather than a hard Brexit, should be the UK Government’s default position?

"Single market membership isn’t just the best way of minimising the economic harm of Brexit; it is the obvious democratic compromise in a divided UK.

“And so my priority for the year ahead is to continue to make the case for single market and customs union membership.

“I believe that that’s a position which can and should command majority support both across the country and in the UK parliament."

The First Minister said Scotland's needs and requirements were different from the rest of the UK when it comes to immigration, making the case for a different approach "overwhelming".

She added: “In arguing for a distinctive immigration policy, we will also recognise that the debate about Scotland’s place in Europe isn’t simply about trade rules and regulations – important though they are.

“It is also a debate about who we are, about what sort of country Scotland aspires to be. The debate about Brexit is partly about how to ensure that Scotland remains an inclusive, welcoming, outward-looking country – one which seeks to contribute to the wellbeing of the wider world, and which also seeks to benefit from our openness to new people and new ideas.”