Two referendums could fundamentally change Britain's place in the world within 10 years, leaving the United Kingdom reduced to a rump of England, Wales and Northern Ireland outside the European Union.
David Cameron signed an agreement with Scottish first minister Alex Salmond in Edinburgh today paving the way for a 2014 independence ballot with Scottish voters given a simple Yes-No option.
And the prime minister is reported to be considering offering the British people a referendum in the next parliament on whether or not to agree to a looser relationship with the EU.
Eurosceptic Tory backbenchers doubt the prime minister's sincerity when it comes to his anti-EU credentials with MP Stewart Jackson warning that "time is running out" for Cameron to commit to a referendum.
But Cameron will attend a meeting in Brussels on Thursday, amid reports eight of his cabinet colleagues want him to issue a stern threat to his 26 fellow EU leaders.
According to the the Mail on Sunday, Michael Gove is said to want the prime minister to tell them: "Give us back our sovereignty or we will walk out."
The education secretary is said to have told friends: "We have to tell them if they don’t return some of the important powers they have snaffled from us, we will leave. We have nothing to be scared of."
SEE ALSO: Peter Kellner: Scotland is Pro-Salmond, Anti-independence
If an EU referendum is held, Cameron would then gamble that British voters, which he will hope still includes the Scottish, will choose to stay part of the EU on the renegotiated, looser terms.
The prime minister's spokesman said on Monday: "He believes there are benefits in being in the EU but he has also made clear he's not happy with the status quo".
Cameron's nightmare scenario would be to go down in history as the prime minister who presided over the break-up of the United Kingdom and then had to lead what was left out the European Union.
However professor Robert Hazell, the director of UCL's Constitution Unit, said at the moment the double gamble was worth taking.
"It is most unlikely that Scotland will vote for independence. And it is pretty unlikely that the UK would vote to leave the EU," he told the Huffington Post UK.
"Referendums are generally conservative devices, in which people tend to vote for the status quo."
The latest Britain-wide poll for the Sunday Times suggests that independence remains 69% of Scots believing their country would be worse off outside the UK.
However in the same survey 48% of those asked across Britain said they would vote for the country to leave the EU if given the option, compared to 32% who would vote to stay.
In his analysis of the prime minister's negotiation over the Scottish independence ballot Hazell said: “Just on points, Cameron has won this first round 3:2."
But he warned Cameron may be disappointed on one count. "The UK government had hoped that the referendum might decide the issue of Scottish independence once and for all.
"But these issues cannot be resolved for all time. The issue of how much independence and autonomy Scotland should have will always be with us."
Observing the risk Cameron is taking with the future of the country, Hazell adds: “Foreign observers from Canada and Spain have expressed to me their amazement and admiration that the UK government has been willing to facilitate this referendum. They say that could not happen back home."
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