Scottish independence: Former prime minister John Major gives warning 28 November 2013 Last updated at 22:21 Former Tory prime minister Sir John Major has warned that there can be no "quasi independence or half-way house" when it comes to Scottish independence. In a speech to the Institute of Directors in London on Thursday night, Sir John said there "cannot and will not be" a Sterling currency union. This is the intention of the Scottish government. The Scottish government said Sir John was wrong to suggest the rest of the UK could lay claim to all the UK's assets. Sir John's comments follow the publication of the Scottish government's white paper on Tuesday, which states that an independent Scotland would retain the pound, join a currency union and the EU. But in his speech, he argued that independence would mean Scotland walking away from the UK and its institutions - including the Bank of England and Sterling. "A currency union, which the SNP assume is negotiable, would require the UK to underwrite Scottish debts," he said. That cannot, will not, happen if Scotland leaves the Union. There can be no halfway house, no quasi-independence underpinned by UK institutions. Scotland could perhaps - in time - adopt the Euro. But first she must apply to join the EU, where many states would have concerns about the accession of a separatist member. Quite wrong While conceding that the rest of the UK would lose influence in Europe, Nato and the UN if Scotland voted Yes, the former prime minister minister said Spain, worried about Catalonia, was not likely to easily accept Scotland into the EU. Scottish voters need to know the chilly reality of what is being offered to them End Quote Sir John Major Former Prime Minister He said: "How would Spain feel - with breakaway movements in Catalonia and the Basque Country? Spain uses uncertainty over EU membership to deter Catalonia from even holding a referendum on independence. It is hardly likely she would happily wave in Scotland. Spain will not be alone in being wary of separatist tendencies. He added: "Even if Scotland were to enter, she would discover that within the EU the clout of the smaller population nations is small. Time and again, she might regret the loss of automatic British backing. Scottish voters need to know the chilly reality of what is being offered to them. A spokesperson for Scotland's First Minister Alex Salmond said: "Sir John Major is quite wrong to try and claim that the rest of the UK should lay exclusive claim to all the assets of the UK, which the people of Scotland contribute to and of which Sterling is one. But he is also just about the very last person the No campaign should be calling on to make their case - he was the Tory prime minister who presided over his party's complete wipe-out in Scotland, and the more he tries to lecture the people of Scotland, the better it will be for the Yes vote. EU referendum In his speech, Sir John also warned that Britain would pay a "severe price" if it voted to leave the European Union. He said leaving could cost billions, would leave the UK isolated internationally but still required to implement EU regulations it had no part in framing. Sir John - whose premiership was scarred by long-running battles with Tory Euro-sceptics - backed David Cameron's strategy of renegotiating Britain's membership before staging an in/out referendum as the best way of finally resolving the Europe issue. He said the government still needed to be realistic about what it could achieve in the negotiations. He said it would be a "truly dreadful outcome" for both the UK and the EU if the result of the referendum - promised by Mr Cameron if the Tories win the next general election in 2015 - was that Britain decided to leave. "Of course, we would survive, but there would be a severe price to pay in economic well-being, in jobs and in international prestige," he said. In a world of seven billion people, our island would be moving further apart from our closest and largest trading partners, at the very time when they, themselves, are drawing closer together. This makes no sense at all.