THE Scottish Government has flatly denied claims that Scottish Water would be privatised if Scotland became independent.

Reports said Alex Salmond would make a U-turn on his opposition to the move and change it into a public benefit corporation like Network Rail.

Selling it off could raise up to £2.7 billion, and it was claimed that Mr Salmond had hinted at the move earlier this year when he said Scottish Water was a successful company which could "cheaply and easily" borrow from financial markets but due to its status was restricted to borrowing from the Scottish Government capital allocation.

A Scottish Government spokesman said: "The story is wrong. Of course we want Scottish Water to have the ability to borrow so that we can boost infrastructure investment, and we are equally clear that it would remain a company in public ownership on that basis – both under devolution and with independence.

"Network Rail is able to borrow – Scottish Water should have the same status, as the First Minister said, and would certainly have the ability to borrow in an independent Scotland, but it does not need to have the same structure as Network Rail to borrow."

The spokesman said Scottish Water has been a success story.

He added: "Following independence, the Scottish Government would allow Scottish Water to issue bonds to the capital markets and such bonds would be extremely attractive to a range of investors."