SCOTLAND is the most prosperous part of the UK outside London and the south-east of England, according to new research.

It showed that of the 12 nations and regions of the UK, Scotland's economic output per head of population is 99%, well behind London where the figure is 171% but well ahead of Wales, lowest at 74%.

Finance Secretary John Swinney said the analysis by Financial Times research was "welcome and important" and confirmed Scotland's economic potential "with the powers of financial responsibility and independence".

The figures also show that, with the exception of London, Scotland was the only nation or region to show an increase in economic output between 2007 and 2010, recording growth of 1.9%.

However, the report warns it is facing a slowdown. John Hawksworth, chief economist at PwC, said he expected Scotland's economic growth would be about 0.5% this year compared to 1.5% in London and the south-east.

The figures are based on Gross Value Added per head of population and do not include the value of economic output generated by oil and gas production in Scottish waters.

Mr Swinney said that if that was included, an independent Scotland would be ranked as the sixth wealthiest nation among the countries in the Organisation for Economic Co-operation and Development compared to the UK in 16th place.

A Scotland Office spokesman said: "This research is good news and simply proves the strength of Scotland within the UK.

"The facts are speaking for themselves when it comes to showing we are stronger together."