ALEX Salmond last night admitted an independent Scotland could not bail itself out in any future financial crisis but would have to rely on London.

After a keynote speech in the capital, the First Minister, was challenged by Lord Myners, the former Labour City Minister, on the issue of a currency between England and Scotland.

Mr Salmond replied he envisaged in an independent Scotland the "lender of last resort would be the Bank of England".

This suggests that, in another banking crisis, an independent Scotland would have to go cap in hand to London to bail out its institutions.

The FM's remarks came as he prepares to launch his Government's consultation on the independence referendum today in Edinburgh Castle's Great Hall.

But on the eve of the announcement, the First Minister's Hugo Young Lecture opened a new controversy.

The Bank of England poured tens of billions of pounds into Scottish banks to keep them afloat during the 2008 financial crisis.

Lord Myners later ridiculed the idea the Bank would undertake the same role

it fills just now in an independent Scotland.

He said: "It's beyond belief the Bank of England would be the lender of last resort any more than the Bank of China would be. The burden of the bailout would fall on English and UK taxpayers."

Anas Sarwar, the deputy leader of Scottish Labour, said: "Suggesting Scotland's lender of last resort should be a bank over which we had just given up all influence and political control is not in Scotland's national interest.

"Having our monetary policy, fiscal rules and interest rates set by what would be our biggest competitor is deeply flawed and exposes a real weakness in the SNP's plans for how a separate economy would function," added the Glasgow MP.

Earlier in the lecture, Mr Salmond branded the UK an unfair and unsustainable constitutional arrangement, declaring: "England does not, nor cannot, have any veto in the debate on independence but I suspect – I know actually – the vast bulk of the people of England freely recognise Scotland's right to determine its own future."

Mr Salmond said the current constitutional arrangements were "not sustainable because they are not fair. Not fair to Scotland and not fair to England".

He stressed the referendum would be held in the autumn of 2014 because such an important process should not be rushed.

The First Minister also reiterated he would not rule out putting a "devo-max" option on the ballot paper, stressing its consideration was "simply being democratic".

Johann Lamont, the Scottish Labour leader, said: "Alex Salmond does not speak for Scotland on the issue of independence."

Scottish Secretary Michael Moore, who will meet with the First Minister on Friday, insisted the Scottish Parliament's purpose was to allow Scotland to make policy decisions while "remaining part of the UK family".

The world's media will descend on the capital today, with more than 40 foreign press and broadcasters due to attend the launch of the referendum, including from Japan, Australia, New Zealand, China, Russia and the US.

l For live coverage of Alex Salmond's speech today, and to read Tom Gordon's rolling blog of a historic day, visit www.heraldscotland.com from 1.30pm.