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UK faces EU re- negotiation over Scottish independence

(BRUSSELS) - Britain would have to re-negotiate its EU membership if Scotland voted for independence, senior EU sources told AFP as Scotland and England fight a high-stakes referendum battle.

The possible break-up of the United Kingdom made international headlines this week when Scottish First Minister Alex Salmond and British Prime Minister David Cameron clashed on a vote now set for 2014.

Issues include whether Scotland would have to "exit and re-apply" for European Union membership, raising questions about whether it would then have to adopt the crisis-hit euro, unlike London.

But lawyers for the EU said an independent Scotland could be treated as one of two successor states, and that a separate seat for Edinburgh would require only a majority vote among member states.

At the European Council, where leaders stage decisive summits, a deal could be "done by the Council, using qualified majority voting and with the required say-so of the European Parliament," said one of those lawyers.

Cameron last month opted out of a re-negotiation of the EU's Lisbon Treaty on which this guidance is based.

Standard procedure for external accession candidates such as Croatia, which enters in 2013, involves the unanimous backing of all EU governments.

There is no doubt within the EU, however, that if Salmond secures a 'yes' vote, complex three-way negotiations between London, Edinburgh and Brussels will be triggered -- altering Britain's voting clout and financial relations with the EU.

"There is a valid legal question about what 'rUK' (what remains of the United Kingdom) would have to renegotiate," said one senior EU source.

An exit from the UK for Scotland would reduce London's EU budget contributions, but also re-allocate billions of euros in a rebate London gets each year in lieu of French and German farm aid or grants for regional development and social projects.

"All sort of allocations that are country-based" would change, the source said. "We're not talking about policy renegotiation -- but a rewrite of Britain's membership."

On January 25, when Scots the world over celebrate the life of 18th century national poet Robert Burns, Salmond will publish detailed proposals for a referendum whose legal basis, timing, scope, franchise and monitoring is disputed by London.

The Scottish National Party (SNP) leader wants to hold it in late 2014 around the 700th anniversary of the battle of Bannockburn, a famous victory over England better known today for its portrayal in the film "Braveheart."

Salmond wants to use a distinct electoral roll -- granting votes based on residency rights at the time and lowering the voting age to cash in on what polls show is majority backing for independence among young and immigrant voters.

He also wants to offer a middle way characterised as 'independence-lite' that would see Scotland retain ties to the UK such as shared military endeavour.

Cameron, though, wants a sudden-death poll controlled by London, with a single question asking voters if they want to be 'in or out' of the 305-year-old political union joining Scotland and England.

He also opposes lowering the voting age from 18 to 16.

EU officials focused firmly on trying to resolve the eurozone debt crisis are not actively planning for the break-up of Britain.

Many hope the Scottish referendum will return a compromise position granting fiscal autonomy -- the flipside of 'independence-lite,' known as 'devolution max.'

Officials refuse to go public on Scotland fearing a green light for other wealthy sub-states like Bavaria, Catalonia or Flanders.

"We will not comment on hypothetical questions," said European Commission spokesman Mark Gray.

Key referendum issues include dividing the UK's public debt, set to cross 1.4 trillion pounds by 2014 (1.7 trillion euros or $2.1 trillion), and Scotland's claim to some 90 percent of the oil and gas in British waters.

With the UK home to half of all EU drilling platforms, what Salmond has termed a "trillion-pound asset base" also impacts on EU energy security.

Separation would trigger "major fun and games over energy," one EU source said, with billions at stake each year in tax revenue, albeit oil prices are currently on a downward curve and fluctuate wildly.

There are also defence considerations -- namely what to do about Britain's nuclear deterrent based in waters near Glasgow. SNP policy is to banish nuclear weapons from a country of five million people.

But heated debate for the moment centres on what currency Scotland would use. Salmond says it would stay initially with sterling.

British finance minister George Osborne has suggested Scotland could be bounced into early adoption of the euro, powerless to influence the Bank of England monetary authority.

Nationalists respond that the Scottish Parliament's seal on the 1707 Act of Union means it is also a shareholder in this institution.

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