THE SNP Government's case for building the economic future of an independent Scotland on oil and gas has been branded "absolute madness" by the pro-UK campaign after revised figures showed a cumulative downgrade in North Sea income of £11 billion over the coming decades.

Nationalist campaigners hit back, insisting revenue from production off Scotland's shores was an enormous bonus and decrying the No campaign for "talking Scotland down".

The latest forecasts suggest oil and gas revenues will decline markedly.

Figures from the Office for Budget Responsibility (OBR), the UK Government's independent forecaster, show it will decline from 0.4% of Gross Domestic Product this year to 0.03% in 2040/41, with total revenues over the projection period revised down by £11bn.

The projections, revealed by the OBR's third fiscal sustainability report, considers the impact of alternative scenarios for oil and gas prices – high, medium and low – with the cumulative revenues being £82bn, £56bn and £44bn respectively.

It says: "North Sea oil and gas receipts are on a long-term downward trend as the basin matures. At the same time, oil and gas revenues remain the most volatile of the main UK tax receipts.

"They depend on rates of production and extraction, the global dollar price of oil, the sterling/dollar exchange rate, and the level of capital and operating expenditure. And each of these determinants is relatively volatile in its own right."

Between 2018/19 and the end of the projection period in 2040/41, total receipts are now projected at around £56bn – the medium price scenario – compared to £67bn last year, for example £11bn less.

Alistair Darling, the former Labour chancellor who leads the Better Together Campaign, stressed that while the North Sea made an important contribution to the UK economy, it was a declining one.

"It is absolute madness for the SNP to base their case for separation around a commodity that is declining and volatile," he declared.

His Labour colleague, Margaret Curran, the Shadow Scottish Secretary, insisted: "These forecasts expose the hole in the SNP's case for separation - It's just pure fantasy."

The No campaign contrasted the OBR's oil revenue forecast with that of the Scottish Government for the period 2012/13 to 2017/18 and said for the high, medium and low scenarios the black holes were £23.9bn, £14.9bn and £8.3bn respectively.

Murdo Fraser, for the Scottish Conservatives, claimed an independent Scotland would have a huge black hole to fill to pay for public services even based on the most optimistic of the SNP's own calculations.

"Alex Salmond needs to come clean and say how this hole would be filled; by slashing spending or raising taxes, or both?" he asked.

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, pointed to the secret internal analysis by Scotland's Finance Secretary John Swinney in which he accepted oil revenue was set to decline.

Mr Alexander said: "This would leave a massive gap in an independent Scotland's finances.

"Scotland is better off dealing with a volatile resource like oil in the UK, where together we can provide the long-term certainty on decommissioning relief that is helping to bring forward investment right now while managing both the fluctuations and the projected decline in revenues."

SNP MSP Mark McDonald claimed the No campaign's Project Fear was fast becoming a laughing stock. "It pretends it would be really bad for Scotland to have access to our own oil and gas tax revenues but really good for Westminster to grab them all. The reality is an independent Scotland would be less reliant on North Sea revenues than highly successful Norway and more than half the value from Scotland's oil and gas resources is still to come."

Mr McDonald added: "The fact of the matter is Mr Darling's Project Fear will say anything to talk Scotland down because they are incapable of saying anything good about Scotland."

A Scottish Government spokeswoman said: "The fact is Scotland's oil and gas sector is going from strength to strength with record levels of investment in the North Sea projected to reach a record £13bn in 2013 while total investment in companies' plans is worth around £100bn.

"Indeed, this has led to the UK Government itself describing the latest North Sea oil and gas licensing round as a 'bonanza'.

"There are estimated to be up to 24 billion barrels of oil remaining with a potential wholesale value of £1.5 trillion remaining in the North Sea which means, by value, more than half of North Sea oil and gas resources have still be to be extracted.

"The OBR's central forecast is cautious and relies on both production and price forecasts below the levels assumed by industry and other independent bodies.

"The report shows adopting the latest industry production forecasts could boost future tax revenues by £17.4bn above the OBR's central forecast while assuming prices follow a path similar to that assumed by the International Energy Agency would boost future receipts by £25.9bn."