ALEX Salmond has warned that "nonsensical" comments by Iain Duncan Smith on the costs of welfare in an independent Scotland could derail talks between Westminster and Holyrood on the independence referendum.

The claim by the Work and Pensions Secretary that if Scotland broke away from Britain it would not be able to afford its welfare bill and would either have to raise taxes or cut benefits was derided by the First Minister and his deputy Nicola Sturgeon.

The pair were in London for talks with Prime Minister David Cameron and Michael Moore, the Scottish Secretary.

After a meeting in Downing Street – an hour was spent on economic matters followed by 15 minutes face-to-face on the independence referendum – the First Minister emerged to describe the talks as positive and good-natured. He stressed the referendum had to be "built and made in Scotland" and not dictated to by politicians in Westminster and made clear that with goodwill on both sides a deal could be done.

"We could still be blown off course, of that there is no doubt, but we're hoping for a positive conclusion in the next few weeks," Mr Salmond told reporters.

Ms Sturgeon later held another one-to-one meeting with Mr Moore dedicated to the constitution. Both emerged upbeat and used positive language.

The Deputy First Minister said: "I'm very optimistic that over the next few weeks we will have a resolution."

Mr Moore added: "We have every confidence that if we keep going we will have a package that will meet the timetables both governments want to achieve."

They are due to meet again on Monday in Edinburgh.

On the key issue of whether the Scottish Government is backing a one or two-question referendum, Mr Salmond and Ms Sturgeon were reticent, both stressing it was part of the talks. "What I say and do is designed to secure that positive outcome, and that's what I'm doing," explained Mr Salmond.

His deputy added: "Everything is on the table."

However, it was clear Mr Duncan Smith's remarks had angered the SNP Government leaders. Ms Sturgeon branded them "rank hypocrisy" and said the Conservative minister was systematically destroying the welfare system and penalising some of the most vulnerable people in society.

"Scotland more than pays its way in terms of welfare," she declared. "If we had responsibility for welfare, we could design a system that helped people into work but protect vulnerable people and reflect better our values, and that's one of the key reasons why I want Scotland to be independent."

Mr Salmond went further and suggested comments such as Mr Duncan Smith's could derail the constitutional talks.

He said: "There was goodwill within the meeting but it's possible that noises off, of course like IDS, could still blow things off course."

Margaret Curran, the Shadow Scottish Secretary, said: "Alex Salmond seems to be looking for any excuse not to have the referendum. For months we've heard he's been waiting to meet the Prime Minister to hammer out an agreement. Now he had that chance and still nothing is agreed."

Last night, the Scotland Office sought to corroborate Mr Duncan Smith's assertion, pointing to figures that showed the UK Government spent £98.1 billion on pensions and welfare since 2002, while the total revenue from oil and gas was £59.7bn.

"The analysis shows that in no year has oil revenue covered the welfare bill – even in 2009 when North Sea revenue reached almost £13bn," said a spokesman.

Meanwhile, following Mr Duncan Smith's speech in Glasgow on welfare reform, the Coalition Government faced criticism from campaign groups over suggestions it is considering linking future benefit payments to average earnings rather than inflation, a move estimated to save the Treasury £4bn a year.

John Dickie, of Child Poverty Action in Scotland, claimed breaking the link between already inadequate benefit levels and inflation would "condemn the poorest families in Scotland and across the UK to even greater poverty".