Civil servants in Westminster and Edinburgh may have been biased in their dealings with the Scottish referendum, a damning report from a committee of MPs has said, with Scotland's Alex Salmond now calling for the Permanent Secretary to the Treasury to resign.
Both the use of public money and the conduct of "partisan" civil servants were called into question by the the Commons Public Administration Select Committee.
The committee had particularly harsh words for the publication of advice that one of the UK's most senior civil servants, Sir Nicholas Macpherson, gave Chancellor George Osborne that a currency union between independent Scotland and the rest of the UK would be "fraught with difficulty."
Alex Salmond, who is standing for parliament this May
The letter from the Permanent Secretary to the Treasury was only made public "because it suited ministers' political objectives in respect of the Scottish referendum", the committee said, adding that it "compromised the perceived impartiality of one of the UK's most senior civil servants".
Writing in his column for the Press And Journal newspaper, Salmond insisted that Sir Nicholas's position is now "untenable".
He said: "He is totally distrusted by the Scottish Government. He has been openly criticised by a cross-party Commons committee. He is unrepentant about his behaviour.His time is well and truly up. Do the honourable thing and resign."
Sir Nicholas told the committee it was "highly unusual" for his advice to be made public, but said this had happened in a bid to reassure the markets. Salmond quipped in his column today that he was sure Sir Nicholas' resignation would "reassure the markets".
"It seems to be the London Treasury’s single transferable excuse for unacceptable conduct," he wrote. "But then a government department, like a fish, rots from the head down."
In their report, the MPs said: "The only purpose was to use the impartial status of a Permanent Secretary to give authority to the advocacy of a political argument. There were other ways of 'reassuring the markets'. In any case, we do not accept that this was the primary reason for publishing this advice, because entering a currency union with an independent Scotland is a decision for government, not the civil service.
"The advice should not have been published. Its publication compromised the perceived impartiality of one of the UK's most senior civil servants."
A spokesman for HM Treasury said: "As we have made clear before, the question of whether or not the UK would agree to a currency union was an exceptional case where it was important that the arguments were exposed in full before a referendum rather than after it."
Sir Nicholas also told a lecture to the Strand Group in January that he had published the advice "because I regarded it as my duty". He said: "The British state's position was being impugned. Demonstrating that the political and official state were completely aligned would further strengthen the credibility of the Government's position. And it was important that the arguments were exposed before the referendum rather than after it."
But MPs had equally stern words for both sides of the debate. The Scottish independence white paper published by the Scottish government "raised questions about the use of public money for partisan purposes," the Commons Public Administration Select Committee said.
The MPs said the Scotland's Future document had "included a description of the SNP's proposed programme for government that was contingent upon their winning the 2016 Scottish Parliament elections".
"This did not uphold the factual standards expected of a UK Government White Paper and therefore raised questions about the use of public money for partisan purposes."
The committee concluded that "parts of the white paper should not have been included in a government publication" and that civil servants "should always advise against the appearance of partisan bias in Government documents" and added they should "not be required to carry out ministers' wishes, if they are being asked to use public funds to promote the agenda of a political party, as was evident in this case".
A Scottish Labour spokesman said: "The White Paper was a taxpayer funded manifesto for the SNP, not a constitutional blueprint. "It was wrong of the SNP government to put impartial civil servants in this position.
"Scotland's civil service has a proud tradition of objectivity and impartiality. Any attempt to politicise the civil service in Scotland goes to the very heart of our democracy. The SNP government must reassure the people of Scotland that they will take heed of this report and stop interfering with the civil service."
A Scottish Government spokeswoman stated that the "white paper, Scotland's Future, met the highest professional standards, that its contents were entirely appropriate for a government publication and was a proper use of public funds". She added: "The Scottish and UK governments have frequently set out policy intentions whose implementation depends on the outcome of future elections.
"Indeed, just last week, the UK Government budget set out a range of policies of the governing parties where implementation will fall beyond the general election. It is the role of the civil service to work with the elected government of the day to implement its policies. It is not in any dispute that the Scottish Government elected in 2011 stood on a platform of supporting independence and of holding a referendum.
"Scotland's Future reflects not only the powers that would come to Scotland under independence, but how they could be used in a real and practical way. The document makes clear the distinction between these two types of proposal."
Chair Bernard Jenkin MP said a review of the Civil Service Code must occur before any future referendums take place, such as the proposed vote on Britain's membership of the European Union.
"The Scottish independence referendum created exceptional circumstances, but that does not make it acceptable for parts of the civil service to approve the use of public funds to promote the agenda of one political party, to become personally aligned with one side or the other in the referendum debate," he said.
"Referendums currently get no mention at all in the Civil Service Code. We suggest a limited change to the Civil Service Code to address referendums that will remove ambiguity about this. Our proposed wording reflects the advice of leading counsel. This change must be made before any future referendums, such as the possible referendum on the EU."
