Sir John Elvidge, the Scottish Executive's most senior civil servant, has revealed he has started a "substantial exercise" to examine how the 15,000-strong department could become an autonomous organisation.

The Scottish Executive is still part of the UK-wide civil service structure and a key SNP election pledge was to follow the example of Northern Ireland, which has a separate body.

But the Cabinet Office, which is responsible for the civil service, has stressed that the Government would have to agree any proposed changes.

Sir John said he no longer sees the SNP-run administration in Edinburgh as part of the Government, despite Westminster remaining the sovereign parliament for the entire UK.

He said: "My responsibilities are, clearly, wholly to the Scottish government for all practical purposes, I work for a separate government."

No Scottish civil servants have any "division of loyalties between the Government and Scottish Executive, he added.

Meanwhile, Scottish ministers yesterday denied reports they were preparing to ditch their proposals to replace council tax with a local income tax.

Critics claim there is a £871million 'black hole' in the proposals, £400million of which derives from council tax benefit for which Scottish households would no longer be eligible.

Reports yesterday suggested that Mr Salmond will not table legislation unless the Government agrees to transfer the money directly to his administration's coffers.

One source close to the First Minister was quoted as saying: "Unless the money's there, there will be no Bill." But one of his special advisors yesterday claimed the reports derived from a misunderstanding.

http://www.telegraph.co.uk/news/newstopics/politics/scotland/2463463/Alex-Salmond-demands-preparation-for-Scottish-independence-begin.html