The Chancellor's decision to rule out sharing currency with an independent Scotland will prove to be a "monumental error", First Minister Alex Salmond has said.

The SNP leader focused on George Osborne's "dive bomb" as he set out his own vision for links across the UK in a lecture hosted by the New Statesman in London.

Mr Osborne rejected the key Scottish Government proposal last month, just days after Prime Minister David Cameron made an appeal for Scots to vote to stay in the UK in the referendum on September 18.

Mr Salmond said: "In the last three weeks people in Scotland have seen an array of approaches from the UK Government - what they apparently call their Dambusters strategy.

"We were love-bombed from a distance by David Cameron, then dive-bombed at close range by George Osborne.

"The UK cabinet came up to Aberdeen but chose not to meet the members of the public.

"I believe that George Osborne's speech on sterling three weeks ago - the sermon on the pound - will come to be seen as monumental an error as Margaret Thatcher's sermon on the mound some 25 years ago.

"It encapsulates diktats from on high which are not the strength of the Westminster elite, rather they're a fundamental weakness.

"I want to make a contrast, and we shall make a contrast, that we shall seek to engage with the people of England on the case for progressive reform."

The Chancellor repeatedly referred to an independent Scotland being "foreign" to the rest of the UK, Mr Salmond said.

"Scotland will not be a foreign country after independence, any more than Ireland, Northern Ireland, England or Wales could ever be foreign countries to Scotland," he said.

Meanwhile a veteran economist has claimed a currency union would benefit the remainder of the UK more than an independent Scotland.

It would actually be in Scotland's greater self-interest to use the pound unilaterally, but a currency union would benefit both sides of the Border, Professor David Simpson said.

The former World Bank economist rejected the argument that a currency union required a political union to work.