Last checked at 
* UK: very unlikely independent Scotland could keep pound
* Businesses fear new currency could cause turmoil
* 'Yes' campaign says UK would gain from shared currency
By David Milliken
EDINBURGH, Feb 5 (Reuters) - Like many Scots, shop ownerAnne McAlister is drawn to the idea of independence but cannotthrow off nagging doubts about splitting from the rest of theUnited Kingdom.
McAlister would like public policies that are more left wingthan Britain's Conservative government is going to provide. Onthe other hand, she runs a classical music store in the centreof Edinburgh and sells compact discs to English customers bymail. Losing the pound could make that harder.
"I would prefer Scotland to have a lot more power and a lotless of Mr Cameron and Mr Osborne," she said, referring toBritain's prime minister and finance minister. "But what I andmy customers would find really difficult is another currency."
Businesses in Scotland - who send 70 percent of theirexports to the rest of the United Kingdom - are increasinglyfocusing on the independence referendum due on Sept. 18. A keyissue is what currency Scotland would use if the country splitsfrom the UK.
Campaigners for scrapping the 300-year-old union wantScotland to keep the pound, a.k.a sterling. The Britishgovernment says it would be highly unlikely to agree to that.
Last week, Bank of England Governor Carney cited the eurozone crisis to stress the challenge of making a shared currencyarea work - and to show voters that Scotland might lack controlover large areas of policy even after independence.
Without a deal, an independent Scotland could introduce itsown currency, possibly pegged to sterling. Or it could usesterling without London's blessing, as Ecuador and Panama usethe U.S. dollar. Either could leave Scotland exposed to attackby speculators as it ventures into global financial markets.
Brad MacKay, a management professor at the University ofEdinburgh who has interviewed 50 firms on the prospect ofindependence, detects some signs of concern.
Most companies are wary of alienating customers by enteringthe heated debate. Several he spoke to, though, have negotiatedbreak clauses in their property leases which can be activated inthe event of independence.
Power company SSE said last year that independencemade Scotland a riskier bet for investment, and Royal Bank ofScotland has warned it could relocate to London. Energygiant BP warned on Tuesday of "big uncertainties".
Most of Britain's oil and gas lies off the Scottish coast,and they would probably become a mainstay of an independentScotland's economy, which is now about the size of NewZealand's. But exactly how they would be divided is up fornegotiation.
"This is an unprecedented scenario, and there is real andgenuine uncertainty," MacKay said. "There's generally concernthat some of these issues haven't been worked through."
MISPLACED CONCERNS?
Scottish nationalists argue the concerns are misplaced. Theysay the rest of the United Kingdom will recognise that its owninterests will be best served by agreeing to a currency unionwith an independent Scotland, given their close economic ties.
Scotland's First Minister, Alex Salmond, said last week thatformer BoE governor Mervyn King had told him that London wouldease its stance in the event of a vote for independence.
Recent polls suggest such a vote is increasingly likely. AnICM survey last month showed that 37 percent of Scots supportedindependence, 44 percent opposed it and 19 percent wereundecided - far closer than polls last year.
Ivan McKee, a businessman involved in manufacturing and apro-independence campaigner, saw no need for the ruling ScottishNational Party to say what it would do if it could not reach adeal with London.
Last month, Britain's finance ministry said it would honourall UK debt if Scotland voted for independence - and seekrecompense from Edinburgh - ending uncertainty that it might tryto shift some government bonds to the Scottish government.
"They had to step in to calm market fears about the debt,"McKee said. "I think we will see more of that, as the real worldimpinges on this head-in-the-sand approach."
History gives little guide as to how any talks might playout. Scotland and the rest of Britain entered political andeconomic union in 1707, when physicist Isaac Newton supervisedthe introduction of new coins. But Scotland kept aspects of anindependent state, with its own legal system and banknotes.
BUSINESS WORRIES
The impact of independence would vary among businesses,MacKay said. Some sectors, such as energy and biotechnology,would be relatively unaffected, given Scotland's oil and gasreserves and strong university research departments.
But independence would be more problematic for othercompanies, particularly manufacturers that rely on Britishgovernment defence contracts and financial services vulnerableto any currency uncertainty or extra regulatory costs.
Owen Kelly, the head of Scottish Financial Enterprise, atrade body for Scotland's large banking, insurance and asset-management sector, worries that a vote for independence couldrequire the BoE to step in and provide temporary support.
"If there was a 'yes' vote, then I think there would be somevery early activity from regulators and others to address theimmediate volatility that would follow," he said.
Even if the two governments did agree a monetary union, itcould prove vulnerable if markets doubted their long-termcommitment, said Angus Armstrong, an academic at theLondon-based National Institute for Economic and SocialResearch.
Unlike the euro zone, whose member states are bound toever-closer union, the Scottish government has not committeditself to keeping the pound indefinitely, and investors mightdemand a premium on sterling-denominated Scottish debt.
But although there could be short-term costs to thetransition to a new country, and potentially a new currency,Armstrong said Scots needed to take a long-term view.
"Independence is not an overnight thing, it is somethingthat will last generations. It is up to the people of Scotlandto decide whether it would be worth it."
