THE UK Government is to ramp up its Union Jack-themed "GREAT Britain" campaign in Scotland during the independence referendum - even though it was designed for use overseas.

Glasgow City Chambers will be turned into a "British Business House" complete with Union flags during the Commonwealth Games in July to promote the UK to foreign investors. The event will clash with a Saltire-draped "Scotland House" a few streets away which aims to boost the Scottish economy. There will also be a business conference based on the theme of British greatness.

Whitehall sources insisted the use of the GREAT Britain campaign would be handled "sensitively" in Scotland because of the upcoming referendum. However, its prominence is certain to rile some Yes supporters, who will see it as promoting the Union by the backdoor.

The announcement coincides with a £2 million advertising campaign by the Yes Scotland movement aimed at persuading voters to back independence.

A senior SNP source said: "This clearly reflects the Tory government's agenda in the run-up to the referendum, but it's pretty silly.

"Unsubtle attempts to fly the Union Jack over the Glasgow Games suggest the No side are very twitchy about Scotland having any independent representation in the world, even in the field of sport, presumably in case it catches on.

"As Yes support rises and the polls continue to narrow, the jumpier the No side are getting."

First Minister Alex Salmond has previously criticised the GREAT Britain campaign for boastfulness.

"No doubt the politicians at Westminster think [it] is marvellous, but you don't tell [people] you are great, you tell them what you do well.

"You can't just go about saying, 'Whoopee we are great'," he told an interviewer last year.

Scotland's tourism agency, VisitScotland, rejected an offer to take part in the GREAT Britain campaign last year as it uses the Union flag exclusively, even when using Scottish locations and Scottish products to promote Britain overseas.

Launched by the UK Government to capitalise on global interest in the 2012 London Olympics, the GREAT Britain campaign added £550m to the UK economy in a year, mostly through increased tourism, but also from attracting foreign investment and promoting British exporters. It has now been extended to 2016.

Its adverts feature the Union flag and messages such as "Business is GREAT in Britain" and "Education is GREAT in Britain", and it has secured endorsements from Wimbledon champion Andy Murray and the James Bond film series.

Until now, 95% of spending has been overseas. But it is now expanding its domestic activity, including in Scotland. Its British Business House will run in Glasgow during the opening days of the Commonwealth Games, July 23-25. Promoted by UK Trade & Investment, it will be aimed at business "decision-makers" and feature "the best of British", according to Whitehall sources, with seminars, roundtable events and receptions in the City Chambers' committee rooms.

The £500,000 Scotland House, which will run from July 21 to August 3 at City Halls and Old Fruitmarket, is backed by the city council, Commonwealth Games Scotland, the Scottish Government, VisitScotland, Scottish Enterprise and Creative Scotland.

Its aim is to "exploit the international and domestic business opportunities presented by Scotland hosting the Games".

The GREAT Britain business conference in Glasgow on July 22-23 is supported by UKTI, Scottish Enterprise and the Scottish Government.

James Dornan, SNP MSP for Glasgow Cathcart, said: "This summer the eyes of the world will be firmly fixed on Scotland. Regardless of what anyone else does, nothing can draw attention away from Scotland and her people being shown in a brilliant light, as a fantastic nation with huge international appeal and great potential."

A UK Government spokesman said: "We are conscious of the need not to politicise the Commonwealth Games in any way. However, we will be using it as an opportunity to promote Scottish businesses and doing business in Scotland.

"In Glasgow we will take every step we can to help Scottish businesses and make the most of having the Commonwealth visit us in Glasgow.

"We want to see doors being opened, contacts being made, deals being done and jobs being created."