Scottish independence: UK debt to be guaranteed THE Treasury today has sought to calm the markets ahead of the independence referendum by confirming that it would continue to honour UK debts in the event of a Yes vote. However, in an advisory note to the City the Treasury said that Scotland would have to take on a "fair proportion" of the UK's national debt - currently £1.4 trillion - but would not be responsible for money raised through gilts. Instead an independent Scotland would need to raise its own gilts on the market. Responding to the announcement SNP First Minister Alex Salmond said: "This is recognition that the Treasury are starting to come to terms with reality - they have issued the debt and therefore have the responsibility for it - and now common-sense is undermining the No Campaign's self-named "Project Fear." This is a case of the London Treasury being hoist on their own petard as they have effectively endorsed the approach proposed by the Fiscal Commission a year ago and that we outlined in the Scotland's Future paper published last November. "These documents make clear that we remain prepared to negotiate taking responsibility for financing a fair share of the debts of the UK provided, of course Scotland secures a fair share of the assets, including the monetary assets."e said: However, he repeated his threat for an independent Scotland to not take on its share of the UK national debt if it is excluded from a sterling currency zone. He said: "The UK Government, and the No campaign, would be well advised to stop all the bluff and bluster around these matters and accept our offer of sensible discussions. There is a great benefit in being responsible and following the approach of the Edinburgh Agreement in letter and in spirit. On the issue of the currency, for example, they should listen to the overwhelming majority of the people of England who polls indicate see the common sense of sharing a common currency. Former Labour Chancellor and leader of Better Together and former Chancellor Alistair Darling welcomed the Treasury's announcement but said that Mr Salmond needed lessons in basic economics. He said: "This is a sensible move by the Treasury to reassure international markets that the UK will honour its debts regardless of the outcome of the referendum. Markets have been un-nerved by Alex Salmond's threats. He is playing with fire with his irresponsible threats to default on Scotland's debts if he doesn't get his way on currency. It appears that the First Minister needs a basic lesson in economics. The UK Pound is a monetary system underwritten entirely by the UK Government. It's not an asset to be shared like the CD collection after a divorce. He went on: "Keeping the Pound would need a political agreement between what would then be two foreign governments to have a veto on each other's tax rates, spending plans and borrowing levels. But it is an idea that is increasingly dead in the water. We need to know what Alex Salmond's Plan B is - will we set up our own currency or will we adopt the Euro? Today we have a common currency - the Pound - which works because we have full economic and political union, essential to support the common currency. All that would be put at risk with independence. There is no guarantee that Scotland could keep the pound because there is no guarantee that both countries would agree to it. Alex Salmond can't just assume that everyone would fall into line with whatever he says. Click here to read the policy paper on UK debt (PDF) Oil for debt swap proposed What would happen to Scotland's share of the national debt Analysis: The economy of Scottish independence Scottish indepedence: Fiscal black hole Eddie Barnes: The £130 billion question on share of debt