ENTERING a currency union with the rest of the UK is a common sense position overwhelmingly in the economic interest of all involved, Deputy First Minister Nicola Sturgeon has said.

She claimed the UK Government was "cutting off their nose to spite their face" by opposing plans to share the pound, and accused Westminster's stance of being motivated by purely political reasons.

The comments come as a Treasury report suggests a Yes vote in 2014 would force Scotland to create its own currency or join the euro, and follows criticism of the SNP's current plans by a leading economist.

Jim Cuthbert said earlier this week the SNP must develop plans to create a new currency if Scotland becomes independent and warned that proposals to keep the pound could expose the country to the "high likelihood of a potentially catastrophic crisis in the not-too-distant future".

Rebuffing the claims, Ms Sturgeon said: "An independent Scotland will keep the pound because it is in everyone's best interests, and to try and suggest otherwise simply flies in the face of the facts."

A Treasury spokesman said: "The simplest way to guarantee keeping the pound is for Scotland to stay in the UK. The current arrangements of a full monetary, fiscal and political union with substantial devolution deliver long-standing benefits."