ALEX Salmond explained in some detail yesterday why he believed George Osborne was bluffing when he rejected the First Minister's proposal for an independent Scotland to enter a currency union with the rest of the UK.

The Chancellor, he argued in a speech to supporters in Aberdeen, was exaggerating the risks to the UK of sharing the pound and playing down the advantages. In making his case, the First Minister cited two new pieces of analysis by the Scottish Government.

The first suggested the Treasury had overestimated the size of Scotland's banking sector and was wrong to conclude that, in the event of another financial crisis, it posed a risk to an independent Scotland.

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The second analysis presented an "illustrative calculation" of the cost to businesses south of the Border of having to trade in a separate Scottish currency. At £500 million, Mr Salmond insisted, those transaction costs would be so high that businesses would simply not allow a UK Chancellor to reject a formal deal to share the pound.

Mr Salmond is surely right to highlight the possible cost of creating a new currency in an independent Scotland. Whether that would be an over-riding factor for the rest of the UK is far from clear.

As Danny Alexander, the Chief Secretary to Treasury, pointed out, if transaction costs were paramount, Britain would have joined the euro single currency long ago.

As for the perceived risk to the UK, Mr Salmond's opponents were equally unmoved. The dangers outweigh the advantages, they insisted. Mr Osborne might be bluffing. He might, as the First Minister claimed yesterday, have begun a long and tortuous process of negotiation. If he has, it is clear the UK would seek to impose the most stringent conditions possible on the government of an independent Scotland as the price for agreeing a pound-sharing deal.

Then again, Mr Osborne might be telling it straight. If Scotland has the right to choose its best future, so does the rest of the UK and the Chancellor might just be exercising that right.

It leaves voters in a difficult situation. Far from the clarity most people have been demanding, the debate appears to have become a game of bluff and double bluff.

The First Minister's best hope of regaining the initiative is by exploring a Plan B for the currency of an independent Scotland. His defence of the currency union was yesterday backed clearly and forcefully by his Fiscal Commission Working Group, the experts who drew up the policy.

But the news it is to meet again and will continue to advise the Scottish Government as the campaign unfolds possibly opens the door to reconsidering the options.

In a statement issued through the Scottish Government, its members saw fit to remind us that their report last year presented a number of currency models that were "perfectly viable" for an independent Scotland.

It might be time to revisit them. As the referendum draws closer, Mr Salmond will come under growing pressure from voters to set out a fallback plan, just in case Mr Osborne is not bluffing.