The issue of when Scotland should hold a referendum has been simmering away for months, but David Cameron's intervention this weekend has brought the issues into sharp focus. It involves a series of legal and constitutional considerations, and a lot is currently unknown. Here's what is clear, so far:
What's on the table?
At the moment things are "fluid", as they say, and the situation is starting to move very quickly. A Bill going through parliament at Westminster would increase the powers of the Scottish Parliament, allowing it to vary Scotland's tax rate further and decide its own spending priorities. What looks likely to happen is that David Cameron will add an amendment to the Bill allowing for a binding referendum on independence, but with clauses.
What are the clauses?
David Cameron seems inclined to demand any referendum must take place within 18 months of the Bill being passed, and that the referendum should be a simple "in or out" question on whether Scotland should remain part of the UK. This puts him at odds with Scotland's nationalist first minister Alex Salmond, who has said the refendum shouldn't happen at least until 2014, and that there should be a third option, so-called "Devomax". This would involve radically extended powers for the Scottish Parliament meaning Westminster had almost no control over Scotland, but technically the UK would remain intact.
UPDATE: On Monday 9th of January, Scotland's Deputy First Minister Nicola Sturgeon indicated that the SNP would, after all, accept a simple "yes/no" referendum.
How long has Cameron got to make the changes to the Scotland Bill?
The Bill has already gone through the Commons and is in committee stage in the Lords. Amendments can still be made to the Bill in the Lords and agreed by the Commons. The government could stall the Bill's passage through the Lords while it drafts the amendments - the question is whether the Lords would accept them.
Who can decide whether there will be a referendum?
This is disputed by London and Edinburgh but the consensus is that whilst the Scottish Parliament could trigger an advisory referendum, only London could trigger a binding one. Pedants point out that all referenda are technically non-binding, since the Westminster parliament can veto anything it likes, in theory.
Why does David Cameron want the referendum to be held within 18 months?
Cameron claims he is making this claim based on legal advice, but the general feeling among commentators is that the later the referendum takes place, the greater the chances of Scotland voting for independence. If the referendum were held later, say in 2014, many government cuts and austerity would have kicked in by then. Some of these will affect Scotland, which has a very high proportion of public sector workers compared to England.
Why does Cameron not want there to be three questions in the referendum?
Cameron's preferred option is for there to be an in/out referendum first, and assuming Scotland choses to remain in the UK, to offer radically enhanced devolution after the referendum.
Why has Alex Salmond decided he only wants the referendum to be held in 2014 or later?
Opinion polls in Scotland suggest the propotion of people who want full indepencence is growing, but slowly. Salmond is said to favour 2014 because it's the 700th Anniversary of The Battle Of Bannockburn, when Robert the Bruce achieved a significant victory over the English. Salmond expects nationalist sentiment to peak in 2014 because of this. In addition the Commonwealth Games are being held in Glasgow in 2014, compounding the sense that Scotland is a separate entity from England.
If Scotland voted for independence would it happen immediately?
Unlikely because there would be signficant legislative and treaty changes required. How the Navy and other armed forces would be carved up would require negotiation, and most believe that several EU treaties would need be re-negotiated. Alex Salmond has said that the Queen would remain head of state and the pound would remain as the currency, but many other areas of public life would need to be re-considered on both sides of the border.