THE Chancellor Philip Hammond has emphatically ruled out a separate Scottish deal on Brexit, potentially pushing Nicola Sturgeon closer to a second independence referendum.

Speaking shortly before a meeting with the First Minister at Holyrood, Mr Hammond bluntly rejected a separate deal for Scotland or any other part of the United Kingdom.

He said those hoping for a bespoke arrangement on immigration and trade were “clutching at straws” and should accept Brexit rather than “resist the will of the people”.

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He said a different system for Scotland was “impractical” and “not a realistic prospect”.

Because the UK market was four times more important to Scotland than the EU, he said it was “not at all clear” how being outside the UK’s arrangement with the EU could help, and would, he believed, “be a disadvantage overall to Scotland”.

He said the UK government also opposed a separate deal on principle, as it wanted a united UK position going into Brexit negotiations next year.

An SNP source said: "This will backfire badly on Philip Hammond. A Tory Chancellor coming north to throw his weight around and trying to lay down the law to Scotland will go down very poorly with people worried about the impact of Brexit on jobs, household budgets and our economy.”

The unambiguous comments, reinforced by subsequent Westminster briefings, suggest Ms Sturgeon’s hope of maintaining Scotland’s membership of the EU single market in the event of a hard Brexit is doomed, with significant implications for the constitutional debate.

Earlier this week in Dublin, the First Minister confirmed independence “remains firmly on the table”, and said if Brexit badly damaged Scotland's interests “then the people of Scotland must have the right to choose a different future”.

The First Minister intends to publish her proposal for a special Scottish deal later this month.

It would require the active support of the UK government to work, with London willing to sacrifice other demands in Brexit talks to secure a bespoke deal for Scotland.

But speaking to the media, the Chancellor was clear: “Honestly, I think this is not a realistic prospect. You only have to think about it for a few moments to realise a separate immigration deal for any part of the United Kingdom would be impractical."

He added: "This is a United Kingdom issue and the will of the people of the United Kingdom was to leave.

“We’re clear that we can’t have a different deal or a different outcome for different parts of the United Kingdom.

“We have to work together as a United Kingdom now to get the best possible deal with Europe.

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“I look forward to us moving on from this slightly backward looking, clutching at straws, trying to resist the will of the people [attitude] to embracing it [Brexit], recognising it's going to happen and committing to work together to make sure it’s done in a way that is most supportive of the UK economy and the Scottish economy.”

The Chancellor also backed Brexit Secretary David Davis, who earlier said the UK might pay for access to the single market after Brexit.

Mr Hammond said his colleague was absolutely right to take a “flexible and open-minded” approach to negotiations to maximise the UK’s deal.

However he refused to comment on whether Holyrood should have a vote on triggering Article 50 through a legislative consent motion, saying it would be wrong to comment on a matter which will be raised next week at the UK Supreme Court.

He also warned the SNP’s plan to make high earners pay more income than south of the border deter workers moving to Scotland.

"The Scottish Government will need to think very carefully about the message that sends."

Labour Europe spokesman Lewis Macdonald said: “The SNP must publish a comprehensive Brexit plan as soon as possible. We need full transparency from the Nationalists, otherwise people will simply conclude they are only interested in using Brexit to force another independence referendum on the people of Scotland.”

After Mr Hammond met Ms Sturgeon and her Finance Secretary Derek Mackay, the Scottish Government insisted the Chancellor would consider Edinburgh’s proposals.

A spokesperson for the First Minister said: “The Chancellor said he looked forward to hearing our proposals on Scotland’s place in Europe, and that they will be considered fully by the UK Government – in line with the specific undertaking given to the First Minister by the Prime Minister when they met in Edinburgh in July.

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Westminster sources later said Mr Hammond continued to rule out a Scottish deal.

“Those proposals will be aimed at securing Scotland’s place in the single market, which is vital for jobs, investment and our overall economic wellbeing.”