Britain wants Scotland independence vote soon

LONDON (Reuters) - The government urged the Scottish National Party on Tuesday to set out the timing and wording of a planned referendum on Scottish independence quickly to avoid possible damage to the economy.

The pro-independence SNP won a majority in the devolved Scottish parliament earlier this month, the first party to do so, and pledged to hold a referendum on independence within five years, some 300 years after Scotland and England were united.

Michael Moore, Scottish Secretary in the British coalition government, told Reuters a delay in formulating the question to be asked, and the referendum itself, would create uncertainty for Scotland and the rest of Britain.

"The Scottish government has to be very clear, very quickly exactly what they mean by independence," he said.

"Is it full independence, is it independence-lite? They need to recognise that the longer there is uncertainty about what they mean by independence, or the prospect of it, the greater uncertainty this causes across the United Kingdom."

"That ultimately is not good for Scotland's economy, and for my part I think they have got to take account of those concerns.

"They have got to be able to justify exactly what it is they are asking the people of Scotland to decide and why they should wait to decide that for a number of years."

Alex Salmond, the SNP leader and first minister of Scotland, plans to delay the referendum until late in his five-year term so as to turn the surge in his party's popularity into stronger support for breaking away from Britain.

In 2014, Scotland should gain prestige from hosting golf's Ryder Cup and the Commonwealth Games -- and it will be the 700th anniversary of the Battle of Bannockburn, a significant Scottish victory in Scotland's wars with England.

Moore, whose Liberal Democrats are the junior partner in a Conservative-led coalition government in London, said he would oppose independence. But he said his party was more sympathetic than the Conservatives to the idea of a more federalist system.

"My view is that there is plenty of space within the United Kingdom for us to have the appropriate levels of devolution according to what the different parts want," he said.

"There isn't a majority anywhere in the United Kingdom for Scotland being independent, and that is why I and all my colleagues are pretty relaxed about what we are doing with devolution, without being complacent."

The Scottish and British governments are currently concentrating on the Scotland Bill, which would change the way the Scottish parliament is financed. The SNP wants to amend the bill to give Scotland greater power to tax and borrow.

Moore said the coalition was willing to look at bringing forward capital borrowing powers by a year to 2012 and would listen to the case for increasing the amount Scotland could borrow from 2 billion pounds, bearing in mind Britain's deficit reduction constraints.

He said businesses would be entitled to feel uncertain about what Salmond planned for taxes such as excise duties, and said Britain was best served by a single corporation tax system.

(Editing by Stefano Ambrogi and Tim Pearce)