* UK finmin says Salmond “not being straight” over sterling
* Osborne reiterates currency union not on the table
* Says “sterlingisation” option not feasible for Scotland
By William James
LONDON, May 14 (Reuters) - British finance minister George Osborne on Wednesday accused the leader of Scotland’s independence campaign of misleading the Scottish public by continuing to base his plans for independence on sharing the pound with the United Kingdom.
In a 90-minute cross-examination by parliament’s Scottish Affairs Committee Osborne hammered home the British political establishment’s message that there was no prospect of an agreement to share sterling with an independent Scotland.
Scotland holds a referendum on Sept. 18 which could end the country’s 307-year-old union with England. Currency has been a hot-button issue in the debate between nationalists and the British government, who want to stop Scotland breaking away.
Scottish National Party (SNP) leader Alex Salmond has accused the government of “bluff, bluster and bullying” over its position, arguing that a currency union could happen and that it would be mutually beneficial.
“I would suggest that Alex Salmond should look in the mirror when he makes those assertions because he is not being straight with the people of Scotland,” Osborne said.
“I am absolutely clear there will not be a currency union if Scotland votes to become independent - no ‘ifs’, no ‘buts’.”
In February Britain’s three main political parties launched a unified campaign intended to warn Scots that a currency union was off the table no matter who won a general election in May next year.
Since then, opinion polls have narrowed but nationalists still have ground to make up ahead of the Sept. 18 vote and the “Better Together” campaign against a split has been criticised for taking an overly-negative approach.
On Wednesday a TNS poll found support for Scotland to vote to leave had nudged up one percentage point to 30 percent while opposition rose one point to 42 percent, leaving 28 percent undecided.
Osborne was also withering about the prospect, mooted by nationalists, of Scotland continuing to use sterling without a formal agreement from London - a so-called “sterlingisation” - even if the British government was powerless to stop such an arrangement.
“I don’t think it is feasible. I think frankly it’s a bit of a red herring,” Osborne said, citing a history of economic turbulence in Panama and Montenegro, both of which use the U.S. dollar without a formal currency union.
“Scotland is a much bigger economy, a much richer economy, a much more sophisticated economy,” he added.
“The idea that Scotland could adopt the Panama or the Montenegro approach is just not credible, it wouldn’t last. It would be pretty disastrous for Scotland to even try that.” (Editing by Andrew Roche)