Scottish independence: David Cameron in referendum offer
Prime Minister David Cameron has offered to consider more powers for Scotland, in the event of a vote against independence.
Ahead of a referendum expected in 2014, Mr Cameron admitted Scotland could go it alone, but said he believed in the United Kingdom "head, heart and soul".
He said it would be "deeply, deeply sad" if Scotland became independent.
The prime minister also suggested the move would have implications for the UK's EU and Nato membership.
Mr Cameron has since been in talks with Scottish First Minister Alex Salmond, who said after the meeting: "Things have moved on quite substantially".
He said the only serious issue of disagreement was over the question used in the referendum and whether there should be a second question on "devo max".Talks 'frustrating'
However, he said he wouldn't "buy a pig in a poke" from Mr Cameron over a referendum on independence.
He said: "The prime minister's position is he wants to have one question. My position is we are in the middle of a consultation with the Scottish people and we are open-minded.
"If there is a strong demand from civic Scotland, from the unions, the voluntary sector, the churches, civic society in Scotland, for something different, for some other option to be tested, politicians at the very least should listen to that."
Mr Salmond said it was now incumbent on Mr Cameron and others to set out more details on the offer of further devolution for Scotland.
"The prime minister is now saying for the first time that another option is now on the table. What I said to the prime minister in the discussions is if that is the case, we now have to know what it will be."
Mr Cameron said he had made little progress with Mr Salmond and reiterated that his "absolute priority" was to preserve the United Kingdom.
He said voters in Scotland should be presented as soon as possible with a "simple, straightforward and legal" question over whether they wanted to remain in the UK or not.
He described his discussions with Mr Salmond as "constructive", but told the BBC: "On the issue of independence, separating Scotland, leaving the United Kingdom, I am afraid there wasn't much progress."
Government sources told the BBC the talks had been "frustrating".Anti-cuts protest
Earlier anti-cuts campaigners attempted to disrupt Mr Cameron's arrival in Edinburgh.
A couple of dozen protestors with a banner reading "coalition of resistance" were surrounded by a line of police officers on steps outside St Andrews House in Edinburgh, the headquarters of the Scottish government.
And two people, a 22-year-old man and a 19-year-old woman, were arrested during protests outside the hotel where Mr Cameron made a speech.
Demonstrators from the Occupy Edinburgh movement tried to enter the Apex in the Grassmarket, but were stopped by the large police presence.
Mr Cameron's visit came amid an on-going dispute between the Scottish and UK governments over several referendum issues, including who has the legal power to run it.
The Scottish government is open-minded about including a second question on the ballot paper, asking people if they want more powers for the Holyrood parliament, short of independence.
Mr Cameron said the independence issue had to be dealt with simply, telling BBC News: "We have to settle that question before then going on and asking, I think quite legitimately, is there more that we can do to improve the devolved settlement?
If you put aside a pound a year, and invest it, after 20 years, you could have £30 - multiply by a billion, and you've got the latest piece of Alex Salmond's vision for independence”
"Are there powers that could be devolved, how can we make the United Kingdom work better?"
Asked if he would devolve more power, to Scotland, Mr Cameron replied: "I'm very prepared. I believe in devolution, and I don't just mean devolution in terms of power, I mean devolution in terms of giving people greater control over their own lives."
Making his case for the Union, Mr Cameron said: "I'm not saying that Scotland couldn't make it on her own, of course Scotland could, just as England could - but ideally hope that this doesn't happen.
"I believe in the United Kingdom, head, heart and soul.
"We've achieved so much together, we can go on achieving great things together, so I hope that, when the time comes, Scots will vote to stay in our shared home."
The prime minister said: "It's never been part of my argument that Scotland couldn't make it on her own - there are countries in Europe, small countries that make it on their own, but my argument is, we are better off, we are stronger together, we're fairer together, we're richer together.
Mr Cameron said the UK enjoyed "solidarity", adding: "When one part of the United Kingdom suffers a setback, whether it's a drought or a flood or severe weather or economic dislocation, we are there for each other.
"We've achieved all these things together and I think to throw all that away would be deeply, deeply sad."
The prime minister said there was also a strong economic case for the UK, which he described as the world's 7th largest economy.
He said that, as an independent country, Scotland would have the "advantages of oil but the disadvantages of an over-extended banking system", while other costs like pensions and benefits would come into play.
The PM went on to say there would be lots of "consequences" for organisations like the armed forces, the BBC, the NHS and the UK's nuclear weapons, based at Faslane Naval Base on the Clyde.
"The UN Security Council seat, our membership of the European Union, our leadership in Nato, our nuclear deterrent, our strong armed forces, they are all things that belong to the whole of the United Kingdom," he said.
What's known at the moment
|SNP position||Unionist position|
Wants the referendum in the autumn of 2014
Wants the referendum "sooner rather than later"
Backs a "yes/no" ballot but is open minded on including a second "devo max" question
Wants a one question "yes/no" ballot
Wants 16 and 17-year-olds to be able to vote in the referendum
Backs the status quo with 18 and over able to vote
Has agreed to the Electoral Commission overseeing the vote
Wanted the Electoral Commission to oversee the vote
"Clearly you can't break them in bits, as the defence secretary put it, you can't snap parts of our defence industry off like a bar of chocolate if Scotland was to go its own way."
Mr Cameron described himself as "one voice among many" in the independence debate, adding: "There will be Labour politicians, Liberal Democrat politicians, people of no political party, people who hate politics will all step forward and make arguments about whether Scotland should stay in the United Kingdom or not."
The prime minister also dismissed support for independence among so-called English nationalists, saying he was "not interested".
Earlier this week, Scottish Secretary Michael Moore held the first in a series of talks with Mr Salmond on arrangements for the referendum.
UK ministers say the Scottish Parliament needs extra devolved powers for the referendum to be legal, and has proposed a temporary transfer.
The SNP, which says it would be entitled to hold a "consultative" referendum, has welcomed the coalition's offer, but has warned it not to try to dictate terms.
UK ministers also want the vote to be staged sooner than the SNP has proposed, and they also disagree with calls to let 16 and 17-year-olds vote.