Scotland could revert to a 400-year-old currency called the "merk" if it becomes an independent country, an eminent economist has suggested.

Professor Gavin McCrone, a former chief economist at the Scotland Office, said that the new state could follow the example of the Republic of Ireland when it split from the United Kingdom in 1922 - by establishing its own currency which is pegged to the pound.

But after an initial period of monetary union with the rest of the UK, "sooner rather than later a Scottish government would find it necessary to set up its own central bank as lender of last resort, which would also have power to issue its own currency".

He added: "This could be the restoration of the pre-1707 pound Scots, or indeed the merk, and it could be pegged against sterling initially on a one-to-one basis, as Ireland's currency was for a long time, which would reduce transaction costs."

The merk was a silver coin in use in Scotland in the 16th and 17th centuries, worth 13 shillings and 4 pence or about one English shilling. Half-merk and quarter-merk coins were also issued.

If Professor McCrone's merk idea does not find favour, Scotland has an extensive range of former coins from which to draw inspiration, including the dollar, pistole, lion, ryal, ducat, "sword and sceptre" and even the unicorn, a coin issued by James III in the 15th century. Lower-value coins included the bawbee, groat, testoon and plack.

To read the complete article, see:Merks and bawbees: Scotland looks at its currency choices ahead of independence vote(www.independent.co.uk/news/uk/politics/merks-and-bawbees-scotland-looks-at-its-currency-choices-ahead-of-independence-vote-9322868.html)