SCOTLAND'S economy would be "on hold" for five years in the event of independence while Holyrood updated the legal environment for business, according to the Scot who represents the UK's entire financial sector.

Lord Mayor of London Fiona Woolf, who speaks for banks, insurers and fund managers in Glasgow and Edinburgh as well as the City of London, said huge legislative change would be needed after a Yes vote, which would take years to develop, scrutinise and put into effect.

She said: "My worry is that you would lose five years putting this in place before you would see what the effect on the economy would be."

Woolf, 63, a lawyer who was born and raised in Edinburgh, said recent suggestions that RBS and Standard Life might move their HQs from Edinburgh to England to be closer to most of their customers were "credible", especially as industry regulators and EU law might demand it. She said: "It is particularly credible from a regulatory perspective, because their primary role is to protect consumers, and if the consumers are substantially south of the border you'd find regulators worried about that."

She added there was concern that other Scottish firms might migrate.

"It's certainly a possibility. The financial services sector is so international. There are a lot of jobs at stake north of the border... Many of them are linked to London."

Around 180,000 people are employed in finance and related professional services in Scotland, or 7.5% of the workforce, contributing £12bn, or 11%, a year to the Scottish economy.

Woolf rejected criticisms that London hogged finance jobs and drained investment and talent from Scotland - the so-called "dark star" effect mentioned last week by Alex Salmond. "London throws off two jobs in financial services for every one it has and you'll find a disproportionate number of those in Edinburgh."

Almost a quarter of jobs in Edinburgh are in banking, insurance, securities, accounting, management consultancy and legal services.

Only the second female Lord Mayor since 1189, Woolf was elected for a one-year term last autumn, and spends around a quarter of her time promoting UK financial services overseas.

She said that included singing the praises of services in Scotland. But the picture would inevitably change in the event of independence.

"In order to put in place all the arrangements that you would need you would be looking at a big reform and legislative programme. That would take time, probably five years or so. During that period you'd have a lot of uncertainties and the world would be on hold."

Despite focusing on pitfalls, Woolf hinted if she had a vote she would not necessarily vote no.

"If I'm right in thinking that the questions in my mind can't be answered, then I would have to be in the No camp. If someone can answer them definitively between now and [September 18], then I would stay in the Don't Know camp."

A Scottish Government source said: "The Lord Mayor is entitled to her views but we are now expected to believe we will lose almost the entire complement of our hard working financial sector workers. The people of Scotland will simply laugh at this latest ridiculous claim and put it down to the latest instalment of the No Campaign's self-named Project Fear."