Alistair Carmichael said it is up to the pro-union Better Together groups to ask tough questions while also painting a positive vision of the future after a No vote.
"This is a moment for cool heads in the campaign. Yes, there has been a slight narrowing in the polls, but that's not universal and I think six out of the last eight polls all show pretty much the same thing we've seen for the preceding 18 months," the Orkney and Shetland MP said at the party's conference in Aberdeen.
"There's a balance to be struck. In every campaign you have to have a balance between the positive and the negative. You have to be able to offer a positive vision.
"At the same time, where you have a Yes campaign that is determined to misrepresent reality to the people of Scotland, then I think it is perfectly legitimate to point out the things that matter, like the currency, like the European Union membership.
"The truth of the matter is that if the bland assurances of the SNP are accepted without question, and it then turns out on the other side of a Yes vote that they are without foundation, then there's no going back.
"The arguments have got to tested and that's what the campaign is about."
Mr Carmichael and Scottish party leader Willie Rennie have both pushed a so-called "sunshine" policy to promote a positive vision of Scotland remaining in the union. It comes as Better Together has faced accusations of being too negative and of failing to capture the imaginations of disaffected voters, particularly in urban central Scotland.
The UK Government is also having to fend off suggestions that the decision to rule out a currency union after independence is just a bluff.
During his speech to activists, the Scottish Secretary suggested the current debate on the country's future is "pythonesque".
Instead of asking what the Romans have done for us, he asked: "What has the UK ever done for us?
"Apart from a strong and stable currency and influence in the EU obviously, the strongest growth in the G7 group of nations, and record low interest rates, and falling inflation, a single energy market for Scottish renewables, the capacity to rescue the banks, the finance to invest in oil and gas, a single jobs market with no barriers to employment, the second biggest international aid budget in the entire world," he said.
He also listed permanent membership of the United Nations Security Council, a higher education research base that invests "most heavily" north of the border and a strong Scottish Parliament.