Falling North Sea oil revenues and an ageing population will create even tougher economic choices for an independent Scotland than the UK as a whole, according to an economic think tank.

Scotland would need to cut public spending, increase taxes, or both, to ensure fiscal sustainability over the next 50 years, a new briefing paper by the Institute for Fiscal Studies (IFS) said.

But independence could also give Scotland an opportunity to create an "optimal tax system" which could lead to some taxes being lower than the UK as a whole, the IFS said.

A more equal society, less congested roads and cross-border competition could drive down high-end income tax rates, road tax, corporation tax and excise duty, the paper entitled Fiscal Sustainability Of An Independent Scotland said.

North Sea oil has "more than made up" for Scotland's higher public spending in recent years but this is set to decline, according to the IFS.

Even the most optimistic scenario would boost Scottish tax from the current UK rates to 29% income tax and 28% VAT, or require a 6% reduction in total public spending, it said.

But Scotland would also have different spending priorities to the UK, some of which have already emerged since devolution, meaning budgets could be focused on areas more suited to its local needs.

Lower rents in Scotland could mean a lower housing benefit bill but poorer health may require more disability benefits, the IFS said.

Gemma Tetlow, a programme director at the IFS and an author of the report, said: "An independent Scotland would face even tougher choices than those faced by the UK over the longer term.

"In 2011/12, higher public spending per person in Scotland was more than matched by higher revenues from activity in the North Sea.

"However, over the long term, revenues from the North Sea will probably decline and official population projections suggest that the average age of the Scottish population will increase more rapidly than for the UK as a whole, putting greater upward pressure on many areas of public spending.

"As a result, to ensure long-run fiscal sustainability, an independent Scotland would need to cut public spending and/or increase other tax revenues more than would be required across the UK as a whole."

The IFS said: "Even under the most optimistic scenario we consider, the long-run 'fiscal gap' in Scotland would be 1.9% of national income compared to 0.8% of national income for the UK as a whole.

"A 1.9% of national income fiscal tightening would require policy action equivalent to around a nine percentage point increase in the basic rate of income tax, an eight percentage point increase in the standard rate of VAT, a 6% reduction in total public spending, or a 8% reduction in public service spending. This would need to come on top of the fiscal tightening already planned by the UK government through to 2017/18.

"Public spending per head is higher in Scotland than the rest of the UK while taxation of onshore activity raises a similar amount per head. In 2011/12 the difference between spending levels in Scotland and the rest of the UK was more than made up by higher revenues from the North Sea in Scotland if allocated on a geographic basis.

"However, the outlook for public borrowing in future is less favourable for Scotland than for the UK as a whole because of demographic pressures and the likely decline of revenues from the North Sea over the longer term."

The IFS added: "Independence would give Scotland an opportunity to design a much more efficient tax system than the UK currently has.

"While pressures on the public finances would point towards tax increases, the characteristics of an independent Scotland suggest a number of ways in which the 'optimal' tax system for Scotland might involve lower taxes than that for the UK.

"The Scottish income distribution is more equal than the UK's, so the scope and need to redistribute through high rates of income tax would be less.

"There is less congestion on Scottish roads, so optimal motoring taxation would be lower. Independence could lead to tax competition and cross-border shopping, creating pressures to reduce taxes such as corporation tax and excise duties."

It continued: "Benefit spending as a whole was only 2% higher in Scotland than in Great Britain as a whole in 2011/12.

"The areas where benefit spending differed substantially between Scotland and the rest of Great Britain were disability benefits and housing benefit. Higher disability benefit spending per person is associated with poorer self-reported health and disability statuses.

"Lower spending per person on housing benefit reflects lower-than-average rents in the private and social housing sectors, and a higher proportion of claimants renting from a social landlord.

"Spending on public services in Scotland is 17% higher per person than for the UK as a whole. But again this average masks significant variation by service-area, with spending on health and education, the two biggest areas of public services spending, closer to the UK average, and much bigger differences for smaller service areas such as housing, transport, recreation and culture and economic development.

"The differences in spending patterns have been growing over time, suggesting that the Scottish Government has been using the powers it has under existing devolution arrangements to prioritise services differently to the UK Government's decisions for England."

Launching the paper at the Royal College of Surgeons in Edinburgh today, Ms Tatlow said: "An independent Scotland would face unsustainably increasing levels of public-sector debt over the next 50 years unless further tax increases or spending cuts were announced on top of current policy plans.

"The fiscal gap facing Scotland would be larger than that facing the UK, although the UK itself does face a fiscal gap."

She added: "An independent Scotland clearly can achieve fiscal sustainability but any discussions about changes to tax and spending policies for an independent Scotland would need to be in the context of trying to achieve these long-term fiscal challenges."

IFS director Paul Johnson said Scotland's share of the UK's national debt would be the process of a "long and rather difficult negotiation" with the UK Government.

"We don't know how that will come out," he said.

"We have shown you the effect of doing it on a per capita basis, or one on a much lower level of 40% of national income. It should be fairly clear what would happen if you assume a somewhat higher level of debt.

"This is one of the uncertainties of the whole process - one of many that will result in a rather long and rather difficult negotiation in terms of what the actual number will be in the end."

Mr Johnson endorsed a recent report by the National Institute of Economic and Social Research (NIESR) which proposed an oil-for-debt swap with the UK Government, handing over a larger share of Scotland's oil rights in exchange for a lower share of the UK national debt.

"For a country the size of Scotland to have debt at about 80% of national income is more troublesome than for the UK as a whole so I would be negotiating for less debt," he said.

"I do like the idea that NIESR put forward that you could do an oil-for-revenue swap, because the UK as a whole has a bigger economy and would be able to cope with the volatility that comes with oil revenues."

The Scottish Government hopes to manage this volatility by taking oil revenues out of public spending when the price is high to put in a "stabilisation fund" to spend when it is low, and said there would also be some left over to put in a Norway-style savings fund.

This could be done even when the Scottish economy is in deficit, according to Scottish Finance Secretary John Swinney.

IFS public finance economist Rowena Crawford said: "It's true that you could start contributing to an oil fund before you get total borrowing down to zero.

"The point that the Scottish Government were making is that you don't have to have a complete surplus before you start contributing.

"But if you are no longer using those oil revenues to fund spending, then those are revenues that you are going to have to make up from elsewhere."

Deputy Prime Minister Nick Clegg told a press conference in London: "I don't think the break-up of Britain is inevitable. If anybody needs a salutory warning about the dangers of the break-up of Britain, of yanking Scotland out of the United Kingdom, one just needs to read this morning's independent and authoritative report from the IFS.

"It shows that there would have to be a dramatic level of cuts in public spending in Scotland if Scotland were to become independent in the way in which the SNP envisages. It amounts in the best-case scenario, according to the IFS, to a 6% cut in public spending in Scotland.

"I think it's not exaggerated to say that the IFS analysis suggests that the SNP objective of pulling Scotland out of the United Kingdom would condemn Scotland to a long period of non-stop austerity and spending cuts - not, I imagine, what many SNP supporters have in mind."

Mr Swinney said the IFS report highlights the "broken Westminister system" and the opportunity to manage the economy differently under independence.

But pro-UK campaign Better Together and its constituent parties said the report leaves the economic case for independence "in tatters".

Mr Swinney said: "The whole point of independence is to equip Scotland with the competitive powers we need to make the most of our vast natural resources and human talent and to follow a better path from the current Westminster system which stifles growth and which is responsible for the damaging economic decisions which this report, and its projections, are based on.

"Scotland has strong financial and economic foundations, and even without a single penny from oil and gas, both output and tax revenues per head in Scotland are virtually the same as for the UK.

"Next year's independence referendum will give people in Scotland a choice between staying with a broken Westminster system that has created one of the biggest gaps between rich and poor in the western world, which concentrates far too many jobs in London and the South-East of England, has accumulated vast amounts of debt and which neglects manufacturing and trade, or using the full tools of independence to rebalance the economy, improve equality and support public services.

"Between 1977 and 2007, smaller independent European countries similar to Scotland grew their economies faster than ours, and if we had matched those rates that greater output would now be the equivalent of around £4.5 billion."

The Scottish Government will set out its own proposals to increase productivity and economic growth tomorrow.

Blair Jenkins, chief executive of the pro-independence Yes Scotland campaign, said: "Only a yes vote can put in place the economic levers to produce policies best suited to the needs and aspirations of our people and provide a change of course from the City of London economic model.

"The urgency of independence to meet the demographic challenges ahead is further highlighted. It is extraordinary to see in black and white that UK policies are expected to result in a decline in the population of working age people in Scotland. That makes it clearer than ever before that Westminster is not working for Scotland - and we quite simply cannot afford to stay in the UK."

Former Labour Chancellor Alistair Darling, leader of the pro-UK Better Together campaign, said: "This sober and impartial analysis by the IFS leaves the SNP's economic case for independence in tatters.

"SNP Ministers pretend that in an independent Scotland there would be more money to spend, but that notion has been comprehensively demolished by the analysis from this respected institution.

"Today's report is clear that an independent Scotland would need big cuts to things like pensions, benefits and the NHS or a big increase in tax.

"This is a risk that we don't need to take. The choice facing the people of Scotland is clear - believe Alex Salmond or believe the experts and the facts."

Chief Secretary to the Treasury Danny Alexander said: "Even on the most optimistic scenario, an independent Scotland would require cuts almost two and a half times as deep than if they stayed in the UK.

"The Scottish Government has to confront this uncomfortable reality in their forthcoming White Paper."

Scottish Labour finance spokesman Iain Gray said: "Every time impartial experts look at the finances of independence, the SNP's claims that we will have lower levels of taxation and higher levels of public spending are comprehensively rubbished.

"The IFS, who are experts in their field, have made it apparent that some combination of tax rises or cuts to public spending is the only way to bridge the gap without massively increasing Scotland's debt."

Scottish Liberal Democrat leader Willie Rennie said: "An independent Scotland would have to cut deeper and faster than George Osborne. That is not a prospect that is going to sell the nationalist vision.

"Our Liberal Democrat plan for home rule would give Scotland more tax and spend powers whilst remaining part of the wider UK partnership of nations. This report shows that in the face of big economic decisions we absorb pressures better with the broad shoulders of the UK."