LABOUR ministers drew up secret plans to hive off Shetland – and possibly Orkney – from an independent Scotland as well as to change maritime borders in order to bring North Sea oil into “English waters” as part of a covert campaign to scupper independence, it has emerged.

Newly released documents from the late 1970s reveal the government led by Jim Callaghan (below) created a clandestine “publicity and propaganda” unit to counter the SNP.

The National:

They show there was deep concern over the potential break-up of the Union and the loss of the oil revenue that was propping up the UK’s stagnating economy.

A confidential briefing note for the Prime Minister from January 1977 – written by Anthony Crosland, the then foreign secretary – noted: “Officials in the Foreign and Commonwealth Office have drawn attention to the potential damage to the UK arising out of the SNP’s claim that ‘It’s Scotland’s oil’.”

It expressed concern over the growing perception that “Scotland could take with it into independence the oil which is the basis for much of Britain’s future prosperity”, adding: “It could damage our international creditworthiness by making a separatist Scotland more credible and by giving the impression that the oil reserves which provide the collateral for UK borrowing would in the event not belong to the UK.”

The document was first seen by The Times and has now been viewed by The National.

It went on to examine how the new boundary could be drawn up so that North Sea oil came under “English territorial waters”.

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The memo states that the SNP claim that “it’s Scotland’s oil” is “open to dispute for two reasons”, stating: “First, although questions arising out of the exploration or exploitation of all North Sea oil are subject to Scottish jurisdiction and existing domestic legislation, by no means all of it would belong to Scotland under international law if Scotland became independent.”

It continues: “In principle, the dividing line ought to be settled by agreement, or in default of agreement, by arbitration.

“But the present state of international law on the delimitation of maritime boundaries is so uncertain that it would be extremely difficult to make a confident prediction about the outcome of a hypothetical arbitration, save that it would give to England some waters which are currently, for administrative purposes, Scottish waters.”

The memo goes on: “The one thing that can be said with certainty is that however the dividing line was drawn, it would give England a considerable area of what are now Scottish waters.

“It might also have the effect of putting into English waters a certain amount, and possibly even a great deal, of oil.”

The further point relates to keeping Shetland and possibly Orkney in the UK too in the event of Scottish independence. The memo describes how this situation could be brought about and that it would result in more oil reserves under UK control.

“Second, it has become progressively clearer that if Scotland were to become independent, the Shetland Islands would almost certainly wish to remain with the United Kingdom,” it says.

“It seems inconceivable that HMG [Her Majesty’s Government] would exclude the Shetland Islands from the UK against their will in the event of Scottish independence. If the Shetlands (plus possibly the Orkneys) stayed in the UK, a large part of the northern North Sea now counting as Scottish waters, including substantial reserves of oil, would not be Scottish under international law.”

The SNP and Alba hit out at the revelations.

SNP depute leader Keith Brown said: “This is a timely reminder of how successive UK governments see Scotland. In the 70s it was Scotland’s oil they set out to grab, now it’s the powers of Scotland’s Parliament.

The National: Keith Brown

“There are echoes across the generations – the new Union Unit and legislation to take powers and funding from Scotland’s Parliament are simply the modern-day equivalent of trying to change the border to ensure the oil wealth could not accrue to Scotland. At any sign of Scotland becoming successful, standing on our own feet, and choosing our own future, Labour and the Tories put the interests of Westminster before the people of Scotland.

“With both Labour and the Tories having acted to drag Scotland out of the EU against our will and continuing to refuse to acknowledge the mandate for a second independence referendum, it is clear nothing has changed.

“The only people that will ever have Scotland’s best interests at heart are those who live and work here.”

Alba’s Kenny MacAskill said: “These explosive revelations show the true lengths to which the British Establishment and Labour politicians were prepared to go not just to stop Scottish independence but to gerrymander our maritime borders in order to deprive the Scottish people from accessing their own resources.

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“None of this will come as any surprise to those of us who have long suspected that the organs of the British State were engaged in dirty tricks against the democratic aspirations of the Scottish people in the 1970s and up to the present day.

“The only way we can consign these dark operations to the past is if people embrace the opportunity at this election to vote Alba on the list to return a supermajority of independence supporting MSPs and set Scotland firmly on the path to independence.”

Professor Gavin McCrone compiled a report for the UK Government in 1974 which concluded an independent Scotland would enjoy enormous surpluses and be as wealthy as Switzerland.

Scots voted to establish a devolved assembly in Edinburgh by 52% to 48% in a referendum in March 1979.

However, it failed to be implemented, due to a controversial amendment which stipulated that 40% of the total electorate would need to vote in favour and calls for greater Scottish autonomy were rejected by the incoming Thatcher government.