A coalition between the SNP andtheLiberalDemocrats looked less likely than ever last night after a LibDem MSP accused the Nationalists of being xenophobic.

JamieStone,aseniorpartyMSP, spectacularly upstaged his leader Nicol Stephen's conference speech by describing the Nationalists in terms normally hurled at the BNP and the National Front.

SNP leader Alex Salmond said the "disgusting slur" has put the possibility of a coalition deal between his party and the LibDems "off the scale".

He also said an apology was a pre-condition of both parties sitting down together to discuss a future together in government.

The row was a severe embarrassment for the LibDem leader as his conference speech had been well received by the Aviemore audience.

Stephen, who is also deputy first minister and enterprise minister, took the moral high ground by criticising Labour and the SNP for the "most bitter, negative personal campaign we have ever witnessed in Scotland".

He said: "Already we see the negativity and the name calling, not only from the SNP but now also from Tony Blair and his increasingly unpopular Labour Party.

"Words like charlatans', desperate', ranting', raving', deceit', pathetic' and thepromisesofahighlypersonal attack' do not do much to help people decide, do they?"

Stephen then boasted about how the LibDems would run a "positive" campaign that was the opposite of the other parties' "name calling".

However,hismessagewasunderminedsecondsafterthespeechby Stone, who used an appearance on theBBCtoclaimthattheSNPwas "xenophobic", which means a hatred offoreigners.Hedeclinedthe presenter's opportunity to rethink his remark.

Stone, the Liberal Democrat MSP for Caithness,SutherlandandEaster Ross, is a colourful character in the Scottish parliament, more known for his clubbable nature than for his ability. He has also attracted publicity in the pastforsomeeyebrow-raisingexpenses claims.

One source who watched the incident said: "It was a ludicrous thing to say so soonafterNicolStephen'sspeech, which stressed the virtues of postive campaigning. Jamie Stone shouldn't be let anywhere near a TV screen any time soon."

But the damage done to Stone's political reputation is dwarfed by the harm caused to his party's hopes of forming a coalition with the SNP after May's election.

Stephen used his speech to rule out a pact with the Nationalists if they insist on an independence referendum, but the LibDem leader did not close the door on a coalition if this was policy was dropped.

Salmond last night told the Sunday Herald he would struggle to sit round a Cabinet table with people who thought his party was xenophobic.

Hesaidinastatement:"The prospects of a coalition between the SNP and the Liberal Democrats have just moved off the scale as a result of Stone's blundering idiocy.

"Even the Labour Party at their most frightened have never called us xenophobic.

"I want an immediate apology from Nicol Stephen about the comments of his senior MSP. It is one of the basest insults ever thrown in Scottish politics."

A spokesman for the Scottish Liberal Democrats said he had "not seen" the incident and was unable to talk about the matter.

Stone was unavailable for comment.