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Salmond's advisers continue to show support for sterling zone

THE war of words over the possible currency of an independent Scotland has intensified after Alex Salmond's economic advisers stuck by their support for a monetary union.

The First Minister's Fiscal Commission Working Group (FCWG) restated their backing for his plan for an independent Scotland to share the pound in a formal sterling area with the rest of the UK.

However the conclusion was immediately dismissed by Chief Secretary to the Treasury Danny Alexander, who said the UK Government's decision to rule out a pound-sharing deal was "final".

In a second blow to the Yes campaign yesterday, Glasgow-based generator and heating giant Aggreko became the latest major company to warn that independence could have negative consequences for its business.

Mr Salmond's panel of economic advisers held a rare face-to-face meeting in Edinburgh yesterday amid growing calls for the First Minister to outline a "Plan B" for the currency of an independent Scotland.

But in a statement last night the group, chaired by former Scottish Enterprise chief Crawford Beveridge, said the Treasury had overstated the risks posed by a currency union to the rest of the UK.

The group is to collect fresh evidence to show the plan is in the best interest of the rest of the UK, as Mr Salmond claims, but last night the experts said: "In the event of a vote for independence, agreements will be reached which are in the best interests of both Scotland and the rest of the UK.

"The FCWG is confident this will include a shared currency."

The view will be contradicted by Treasury chief secretary Mr Alexander in a speech to the National Association of Pension Funds in Edinburgh today.

He is due to say: "There will not be a currency union between Scotland and the rest of the UK.

"I've seen people suggest we are not serious about refusing a currency union.

"Let's call this the John McEnroe defence. But our decision - taken in the best interests of Scotland and the rest of the UK - is final. "

The UK Government, backed by Labour, ruled out the currency union plan last month, arguing there was too great a risk of a future crisis in the Scottish economy affecting taxpayers down south. Mr Salmond maintains the stance is a bluff.

The latest currency stand-off came as generator and heating supplier Aggreko, which employs around a tenth of its 5749 global employees in Scotland, said in its annual report that independence was likely to create "additional administration cost and complexity" and lead to "years of uncertainty" for the business.

The FTSE 100 company - led by Rupert Soames, an outspoken critic of independence - said risks included cross-border disparities in trade, tax and regulation, and macro-economic uncertainties in currency options.

It joined Lloyds Banking Group, Barclays, Standard Life, Royal Bank of Scotland, the Macfarlane Group and Breedon Aggregates in highlighting possible risks of independence.

A Scottish Government spokesman dismissed the concerns, saying: "An independent Scotland would have access to the full range of powers to build on the underlying strength in our economy, creating a more prosperous economy."

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