Joining the Euro would be the "only realistic plan B" for Alex Salmond if Scotland becomes independent, according to shadow chancellor Ed Balls.
He told the Observer newspaper: "I fear that an independent Scotland would end up finding that joining the euro would be the least worst of all the bad options."
Balls who has ruled out a currency union if he becomes chancellor added: "It's not what I would choose for Scotland. And I am not surprised at all that Alex Salmond doesn't want to admit it now, but joining the euro would likely be his only realistic plan B."
Attempting to use sterling as the currency of an independent nation without any say over the actual operation of that currency and Bank of England policy would put the Scottish economy in an impossible position, he said.
He added: "Given the size of the UK relative to Scotland, given that Scotland would be leaving the UK, the size of the Scottish financial sector and given the risk, therefore, to UK taxpayers, a sterling currency area would be off the table."