Currency union between an independent Scotland and the rest of the UK would be unsustainable, according to Business Secretary Vince Cable.

The senior Liberal Democrat MP said it is likely that Scotland would end up with its own currency, despite Scottish Government insistence that sterling can be shared in the event of a "Yes" vote in the referendum on September 18.

His comment comes a week after Bank of England governor Mark Carney said currency sharing is possible with the right foundations, such as a strong banking union.

Mr Cable said: "The plan B is a fully separate currency. The logic of what the governor and other people have spelled out is that the problems of a currency union with an independent Scotland are so difficult, so tricky, that it would almost certainly prove to be in Scotland's interests - and indeed the rest of the UK - that Scotland did have its own currency.

"Of course, that would create a whole wave of other problems. It would create a barrier to trade across the Scottish border, as different currencies tend to do, and the problems of managing a fluctuating exchange rate in a country that is very dependent on raw materials.

"The basic arguments about the problems about operating a monetary union suggest that Scotland would finish with its own currency, with all the advantages and disadvantages attached to it."

First Minister Alex Salmond has refused to entertain a "plan B" in the event that the currency union proposal fails.

The Scottish Government's White Paper on independence argues: "A shared currency is in the economic interests of both Scotland and the rest of the UK, as key trading partners. It will make it easier for people and companies to go about their business across the two countries."

Chancellor George Osborne has already cast doubt on whether the arrangement is possible.

Mr Carney, who was speaking in Edinburgh last week, said currency union would require handing over some newly-won sovereignty.

But he steered clear of the political debate, stating: "The Bank of England would implement whatever monetary arrangements were put in place.''

Mr Cable gave his view to MPs on the Commons Business, Innovations and Skills Committee who are looking into possible consequences of Scottish independence.

Economies on both sides of the border will diverge considerably with different currencies, Mr Cable said.

"The divergence could happen in a variety of ways if, as we feel is likely, Scotland did acquire its own currency, because that's what independence would really lead to," he said.

"That clearly affects the rate of exchange, and potentially with an oil-based economy on one hand and a more broadly based UK on the other those divergences and exchange rates can be very considerable and effect business costs on both sides of the border.

"The divergence would take a more extreme form if you have different exchange rates but I think we've argued that would be almost certainly an inevitable consequence of independence because the currency union isn't really sustainable."

The Business Secretary also gave his view on EU membership for Scotland and the future of banking.

The Royal Bank of Scotland may choose to move its headquarters to London, he suggested.

"If you were managing RBS, I think you would almost certainly want to be in a domicile where your bank is protected against the risk of collapse," he said.

"They already have a substantial amount of their management in London and I would have thought, inevitably, they would become a London bank which would be symbolically quite important."

He questioned how straight forward Scotland's route to EU statehood would be.

The Scottish Government expects to negotiate terms in 18 months between a vote for independence and formally leaving the UK.

Mr Cable said: "One simply can't predict, as in several other major areas of policy, what the consequences of that hiatus would be.

"Our understanding is that both legally and in terms of the politics of the European Union it would actually be quite difficult to migrate Scotland to independent membership.

"It may well prove to be trouble-free - we don't know. There is simply a big uncertainty around the whole process. It could take a long time, it could take a short time."

A spokesman for Scotland's Finance Secretary John Swinney said: "Vince Cable's ridiculous comments are at odds with the commonsense remarks from RBS's chief executive, who last week said that if they had to operate in 39 countries around the world rather than 38, that is exactly what they would do.

"Mr Cable has unwittingly highlighted exactly why polls show the vast majority of people in the rest of the UK would expect the Westminster Government to agree to a currency union with Scotland.

"The pound is as much Scotland's as it is the rest of the UK's, and the fiscal commission working group, with experts including two Nobel laureates, have concluded that it's in the interests of both Scotland and the UK to continue to retain sterling in a formal monetary union.

"As Scotland is the UK's second-largest trading market, it would be absurd for Vince Cable or anyone else at Westminster to stand in the way of protecting the benefits this brings to businesses and consumers in the rest of the UK."