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The governor of the Bank of England, Mark Carney, has said a currency union between an independent Scotland and the remainder of the United Kingdom would be incompatible with sovereignty, dealing a blow to Scottish nationalists before next week's referendum on independence.
Speaking in Liverpool to the Trades Union Congress, Carney said a successful currency union would require a Scottish government to go further than countries in the eurozone have so far managed, to make the joint venture work.
His intervention came as the three Westminster leaders announced plans to ditch Wednesday's prime minister's questions in order to go to campaign in Scotland. The emergency move was agreed on Monday afternoon at a meeting between Ed Miliband and David Cameron.
Carney spelled out how cross-border ties on tax and spending as well as on banking rules would be needed as a prerequisite for any deal.
Without watertight agreements to limit public spending deficits alongside rescue plans for banks and savers in the event of a crash, he said a currency union would be unworkable.
"You only have to look across the continent to look at what happens if you don't have those components in place," he said. "A currency union is incompatible with sovereignty."
His comments, made in answer to a question from the TUC audience, showed his attitude has hardened since he spelled out Threadneedle Street's view in January.
Carney said the opposition of Britain's three main political parties to discussing common rules covering monetary, fiscal and tax policies meant a currency union could not get off the starting blocks.
Alex Salmond has maintained that Westminster will be forced to share the pound in the event of a yes vote. Earlier this year the chancellor, George Osborne, Labour's Ed Balls and the Lib Dem Danny Alexander said they would not consider sharing the pound.
However, Carney's comments emphasise that even if all three parties performed a U-turn, the BoE believes Scotland would need to give up much of its new-found sovereignty to maintain a currency union.
Carney's intervention put Salmond and his finance secretary, John Swinney, under fresh pressure to set out whether they would be prepared to pool spending and tax revenues to secure a currency union, by sharing their wealth across the currency area.
Carney told the TUC a third test of a successful currency union was "some form of fiscal arrangement. You need tax, revenues and spending flowing across those borders to help equalise, to an extent, some of the inevitable differences [across the union]."
Salmond has repeatedly insisted that an independent Scotland would keep full control over all tax-raising and borrowing, and would not be required to pool any spending.
In his speech on a currency union in Edinburgh in January, Carney said that in an optimum currency zone, the partner countries and federal states like Germany had to share around 25% of their spending – a position Salmond has refused to accept.
A spokeswoman for Swinney said: "Successful independent countries such as France, Germany, Finland and Austria all share a currency – and they are in charge of 100% of their tax revenues, as an independent Scotland would be. At present under devolution, Scotland controls only 7% of our revenues."
Alistair Darling, the former chancellor who now heads the anti-independence campaign Better Together, said: "Mark Carney has confirmed what we have been saying all along – a currency union is not compatible with sovereignty. It would mean what would then be a foreign country having control over our economy. That's why a currency union would be bad for Scotland, as well as the rest of the UK.
Trade unions in favour of Scotland staying within the UK welcomed the comments. Paul Kenny, general secretary of the GMB, said: "The comments were a breath of fresh air. People keep talking about whether there is a plan B or plan C, but there aren't any, because it is incompatible, as the governor has made clear."
Tuesday's joint statement by the leaders of the UK's three main parties about their plan to campaign in Scotland said: "There is a lot that divides us – but there's one thing on which we agree passionately: the United Kingdom is better together. That's why all of us are agreed the right place for us to be tomorrow is in Scotland, not at prime minister's questions in Westminster.
"We want to be listening and talking to voters about the huge choice they face. Our message to the Scottish people will be simple: we want you to stay."
Prime minister's questions will go ahead but with understudies William Hague and Harriet Harman.
The agreement by the party leaders not to attend PMQs follows intense criticism of Cameron for not planning to go to Scotland until next week. He had been advised that his presence would be a negative influence, but a mixture of his own desperation at the prospect of losing the union and the belief that something drastic was needed to revitalise the no campaign changed his thinking.
Miliband and Cameron made their decision in the knowledge that one poll had put the yes campaign ahead and another was about to be published showing the two campaigns were neck and neck.
They also discussed the decision of Gordon Brown, the former prime minister, to rush ahead with a package and timetable for further devolution. There was an agreement that the no campaign had no time to lose and needed to get back on the front foot before there was a landslide rushing to the yes campaign on a wave of patriotic emotion.
Cameron said: "We have our own ways separately of talking about why we are better together, but I am sure one thing we will say is that it is a matter for people in Scotland, but we all want you to stay."
He sidestepped questions about his own future, saying: "I do really care about this issue, I care passionately about the United Kingdom and I want to do everything I can to put the arguments in front of the people. In the end it is for the Scottish people to decide but I want them to know, and I speak as the prime minister, that we want you to stay."
Miliband's office stressed that three party leaders would not be campaigning together or travelling to Scotland together.
Nick Clegg, the deputy prime minister, said the overall long-term aim was to form a radically decentralised British state, but he rejected calls from Graham Allen, the chair of the political and constitutional reform select committee, to symbolise the three parties' commitment to Scottish devolution by appearing on a joint platform in Scotland.
He also denied that the timetable for Scottish devolution was a panic move or a last-minute effort to cobble together a cross-party deal on devolution. He said the breakthrough had actually occurred in early August, when the three party leaders had agreed a joint statement on "an irreversible process of reform" in Scotland.
He said the latest statement about a timetable was "all about the means of delivering a commitment that was made".
In a further symbolic move, Cameron has decided to fly the Scottish flag above No 10 and other Whitehall buildings until the referendum takes place. The prime minister's spokesman said this would be a "clear message" that the rest of the UK wants Scotland to stay in the union.
He added: "One of the things cabinet discussed this morning is that there is nothing more important than the future of the United Kingdom and the future of Scotland in the coming days. The prime minister has been very clear in his message that we want you to stay and I would put the flying of the saltire over No 10 firmly in that context."
Cameron's spokesman denied that this was a patronising or trivial move, pointing out that the saltire had flown over No 10 on previous occasions, including St Andrew's Day. In the past, Cameron has said Britain does not "do flags on the front lawn".
It is understood the prime minister will return to Westminster after the visit before going to Scotland for a second time next week.
• The headline on this article was amended on 9 September 2014. The original version wrongly stated that Mark Carney had said a currency union would be unworkable.
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