Millions of pounds in pensions and savings would be put at risk in an independent Scotland, a report by the UK Government will today warn.
Analysis by the Treasury found that it would be "difficult and expensive" for Scotland to replicate a number of UK protection schemes – including the fund which guarantees the first £85,000 held in any bank account.
The report will also say that Scotland would be forced to replicate a number of consumer protection and advice bodies, an exercise it warns would be both costly and complicated.
Among those identified include the financial watchdog the Financial Conduct Authority, the Financial Ombudsman Service and the Money Advice Service.
The Scottish Government hit back at the report last night accusing the Treasury of "creative accounting".
Scottish Finance Secretary John Swinney said: "Much of the Treasury paper seems to be based on a flawed, outdated view of the world which takes no account of the substantial banking reforms which have been ongoing across Europe since 2008."
Scottish ministers will release their own finance report this week, focusing on what they say are the strong prospects for growth under independence.
The two documents mark the next phase in the battle for economic credibility raging between those on the pro-independence and pro-Union sides.
Both admit that finance will be a crucial factor in the outcome of next year's independence referendum.
The Coalition paper will be launched in Edinburgh later today by Scottish Secretary Michael Moore and Treasury minister Sajid Javid.
Among its findings will be a warning over protection schemes such as those announced for bank deposits by Gordon Brown in response to the last financial crisis.
At the time, the Labour Government wanted to prevent a Northern Rock-style run on banks.
The Treasury analysis is expected to say that EU law would prevent an independent Scotland remaining part of the UK scheme and that it would instead be forced to set up its own fund.
However, this would prove "difficult and expensive".
The report suggests an independent Scotland would struggle with the scale of the deposits, which would represent more than 100% of GDP.
Part of the problem, the document warns, is the domination of Scotland's two largest banks.
The scheme is funded through a levy on banks, meaning that if either HBOS or RBS were to fail then the burden would lie heavily on the remaining institution.
Deposit schemes are crucial in times of crisis to protect individual savings and prevent the "flight" of money from a country, the Treasury warns.
The report will also say that Scotland would struggle to "maintain an effective stand-alone scheme" to protect defined benefit pensions.
The analysis, the third of 13 papers to be released by the UK Government this year, will also suggest an independent Scotland would struggle to survive another banking crisis.
It will warn that the country would be more vulnerable to shocks because its banking sector would be so large in relation to the rest of the economy
It will also warn that the economy of an independent Scotland would be even more exposed to the banks than Iceland or Cyprus, whose recent financial woes were blamed on the size of their finance sectors.
The Scottish Government dismissed the paper as "far-fetched" and "flimsy".
Earlier this year a report by the Institute of Chartered Accountants of Scotland warned many Scottish companies could face a crisis in their pension schemes following independence because their current large shortfalls would not be permitted because of EU solvency rules.
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