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Slideshow Images of September Follow Reuters Facebook Twitter RSS YouTube Read U.S. economists win Nobel for applying match-making 11:28am EDT In second debate, Obama faces challenges on key issues 14 Oct 2012 Japan's Softbank snaps up Sprint in $20 billion deal | 11:04am EDT Rolling Stones to play four gigs, Jagger hints at more 10:01am EDT Tea Party versus Agenda 21: Saving the U.S. or just irking it? 1:02am EDT Discussed 162 Democrats frustrated by Obama’s ”Big Bird” campaign turn 138 Biden and Ryan in high-stakes election debate 96 Jobless claims fall to lowest in four and a half years Sponsored Links Scotland seals terms of historic independence vote Tweet Share this Email Print Factbox Scotland gears up for 2014 breakaway vote 10:38am EDT Analysis & Opinion Church of England deadlocked over new archbishop for Canterbury: report Related Topics World » 1 of 6. The First Minister of Scotland Alex Salmond (L) and Britain's Prime Minister David Cameron, sign the referendum agreement in St Andrew's House, Edinburgh, Scotland October 15, 2012. Credit: Reuters/Gordon Terris/Pool By Maria Golovnina EDINBURGH | Mon Oct 15, 2012 11:10am EDT EDINBURGH (Reuters) - Scotland set up a historic independence referendum after its leader signed an agreement on Monday with Britain's prime minister finalizing arrangements for a vote that could lead to the demise of its three-centuries-old union with England. Scotland's drive for sovereignty, led by its nationalist leader Alex Salmond, echoes separatist moves by other European regions such as Catalonia and Flanders which feel they could prosper as separate entities inside the European Union. Signed in the Scottish capital Edinburgh, the deal will allow Scotland to decide in a 2014 referendum whether it should become an independent country or stay within the United Kingdom. One of the most contentious issues at stake is the ownership of an estimated 20 billion barrels of recoverable oil and gas reserves beneath the UK-controlled part of the North Sea. Britain is also worried about the future of its nuclear submarine fleet based in Scotland as Salmond says there would be no place for nuclear arms on Scotland's soil after independence. Moving the fleet elsewhere would be costly and time-consuming. Many Scots are unconvinced about independence. Opinion polls show only between 30 and 40 percent of them are in favor - a range that has changed little as negotiations have intensified. But Salmond is banking on his skill as an orator to tap into a centuries-old rivalry between Scotland and England to convince doubters that independence would allow his country to pursue a more distinct left-leaning agenda than its southern neighbor. Salmond said it was a historic day and that the agreement paved the way for "a new partnership in these islands." "The Scottish government has an ambitious vision for Scotland: a prosperous and successful European country, reflecting Scottish values of fairness and opportunity, promoting equality and social cohesion," he told a news conference. Prime Minister David Cameron opposes Scotland's push but London agrees it is up to Scotland to decide its future for itself in a vote. "I passionately believe that Scotland would be better off in the United Kingdom but also crucially that the United Kingdom would be better off with Scotland," Cameron told reporters after the signing. "I will be arguing to keep the family together." Scotland already has many of the trappings of an independent nation such as its own flag, legal system, sports teams, as well as a distinctive national identity. But London argues that an independent Scotland - home to about five million people - would struggle to make ends meet as the bulk of its current funding comes from a 30-billion-pound ($48 billion) grant from the UK government. "Independence is about Scotland leaving the UK, becoming a separate state, taking on all the burdens and risks that go with that and losing the benefits and opportunities that we have as part of the UK," UK Scottish Secretary Michael Moore told the BBC on the eve of Monday's signing. "When we look at the economy, at defense, at our place in the world, on all these big issues, people across Scotland will continue to support Scotland being in the United Kingdom." Scotland and England have shared a monarch since 1603 and have been ruled by one single parliament in London since 1707. In 1999, for the first time since then, a devolved Scottish parliament was opened following a referendum. Nationalists have timed the 2014 vote to coincide with the 700th anniversary of the Battle of Bannockburn when Scottish forces led by Robert the Bruce defeated English invaders. INTRIGUE OVER WORDING The Scottish government will now bring forward legislation setting out the exact referendum date, who can vote, and the wording of the question, along with rules on campaign financing. Cameron and Salmond have been negotiating for months and the broad outlines of their agreement which allowed Monday's signing to go ahead have been widely trailed. Cameron confirmed that Salmond had accepted London's demand that there should be only one straightforward "in or out" question. Salmond had earlier campaigned for a second question, on whether Scotland should be given more powers in the so-called "devo max" form of enhanced devolution that stops short of independence. For its part, London is thought to have agreed to allow Salmond to lower the voting age to 16 from Britain's countrywide 18 - a coup for Salmond who believes that young people are more likely to vote in favor of independence. But for Salmond, convincing his people to support independence remains an uphill task given the tough economic times. There are concerns over what would happen to Scotland's debt and over whether it would automatically become an EU member. A former oil economist, Salmond argues an independent Scotland would be prosperous, entitled to the lion's share of North Sea oil revenues and should be able to borrow at rates no worse than London. (Additional reporting by Isla Binnie in London Writing by Maria Golovnina; Editing by Andrew Osborn) World Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (3) Raelyn wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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