The Bank of England will be the central bank of an independent Scotland which will have an observer role on its monetary policy committee, according to First Minister Alex Salmond.

Mr Salmond continues to reject the warnings of all three major UK parties who say they will not agree to a formal monetary union if Scotland leaves the UK.

He told Sky News that Scotland would "of course have an observer on the monetary policy committee (MPC)" to co-ordinate monetary and fiscal policy "as part of a monetary banking union" with the remainder of the UK.

Mr Salmond said such co-ordination would be necessary to address issues such as the "deep structural problems" in the housing market, which Bank of England governor Mark Carney today cited as the "biggest risk" to the UK's economic recovery.

Liberal Democrat leader Willie Rennie said Mr Salmond is "watering down" his Bank of England ambitions, from direct representation on the MPC to merely asking for a Scottish Treasury observer.

Mr Salmond said the Bank of England "will be our central bank" if Scotland votes for independence.

"It will be our monetary authority in prudential terms as part of a monetary banking union," he said.

"Mark Carney was pointing to the difficulties of trying to control the housing market merely by restricting demand, and that would have very unfortunate consequences for example if interest rates were put up, and therefore pointing to supply as the answer to the housing bubble.

"What I have been saying is a combination of fiscal policy, strengthening the finances of housing associations in co-operation with the monetary authority, would provide one of the answers and one of the solutions."

He added: "In the same way as the Treasury has an observer in the MPC at the moment, yes of course we would have an observer on the MPC.

"But people actually on the MPC are selected for their expertise. The Treasury are there, and the Treasury of an independent Scotland will be there to coordinate the interaction between monetary and fiscal policy.

"And fiscal policy is absolutely crucial in terms of bolstering housing supply.

"For example, the sort of capital cutbacks we have had in recent years as part of the austerity programme from the UK government have made it very difficult for councils around the country to sustain the level of housing supply."

The First Minister, a former Royal Bank of Scotland economist, offered to advise the Bank of England on ways to boost housing supply by bolstering the finances of councils and housing associations.

"I will be very happy to speak to the Bank of England about how we can bolster the finances of housing associations in order to bring about that surge in supply that the governor is pointing to as the real underlying solution to a housing bubble," he said.

Mr Rennie said: "In a desperate attempt to save his policy on a shared currency, the First Minister is watering down his demands for Scottish representation on the Bank of England.

"His party used to argue for a Scottish voice on the MPC, now he just wants someone to watch. There is no consistency in their position and the White Paper makes no reference to observer status.

"In response to the clear rejection by politicians and experts, the First Minister is now prepared to accept poorer terms to persuade them to have a change of heart. The best terms for a currency union are the ones we have now with the UK.

"The SNP's shambolic policy on a currency is even more shambolic today."

A spokesman for the First Minister said: "Willie Rennie has made himself look ridiculous with these remarks - he seems completely unaware that the existing representative from HM Treasury attends Monetary Policy Committee meetings in a non-voting capacity. The Scottish Government would simply be seeking a similar arrangement.

"The First Minister's comments simply reiterated the recommendation of the Fiscal Commission Working Group, which comprises economic experts and two Nobel Laureates - a recommendation endorsed by the Scottish Government.

"In reality, it is Willie Rennie and the No campaign who have the 'shambolic' position on currency - an unnamed UK Government minister recently admitted that 'of course there would be a currency union', and just last week Prime Minister David Cameron was rebuked by the Bank of England for misrepresenting the Governor's position."