Shadow chancellor Ed Balls has urged Alex Salmond to meet him to discuss proposals to keep the pound in an independent Scotland.
The Labour MP is vying for the position of UK chancellor after the 2015 General Election, which is likely to be held about nine months after the independence referendum in September.
Mr Balls pledged to honour the terms of the Edinburgh Agreement, in which the current coalition Government pledged to work in the best interests of Scotland and the UK, and try to make independence work if Scotland votes yes to independence and he is elected to serve in the government of the remainder of the UK.
He also expressed hope that Scotland would be able to join the European Union eventually but said it would involve "some tough discussions with Brussels".
But he warned that independence is "not going to be a good outcome for Scotland", leading to higher taxes, higher interest rates, instability and uncertainty for investors.
He urged Mr Salmond to abandon his demand for a television debate with "English Tory" David Cameron and sit down with Better Together chief Alistair Darling and himself to discuss the SNP's plans for Scotland's future, particularly on the issue of currency.
Speaking during a campaign trip to Lochgelly for the Cowdenbeath by-election, Mr Balls said: "It seems to me that Alex Salmond is very unhappy with the prospect of debating with Alistair Darling and is therefore trying to claim an English Tory should come up and lead the campaign. That's not going to happen in anybody's world.
"If Alex Salmond had the courage of his convictions, he would sit down and talk to me and Alistair about whether he could keep the pound, and be straight with the Scottish people."
He added: "It's important for us to work together.
"Once Scotland decides what it wants to do with its independence vote, we will have to deal with the circumstances as we find them.
"I fervently hope that will mean Scotland is still in the UK, but if Scotland chooses to go for independence then we have got to try and make that work.
"But Alex Salmond has got to be straight with people about what that would mean, and he can't promise the pound, which I think would be very difficult.
"He can't promise to keep taxes down, I think they would go up for Scotland.
"He can't promise to keep interest rates down, there would be a higher interest charge for Scotland because of uncertainty.
"And, more generally, I think it would lead to very big and difficult questions for Scotland's relationships with the rest of the UK and the EU.
"Now, we will work together and try and make things work in that eventuality, but it's not going to be a good outcome for Scotland.
"It would be very difficult indeed to see how any UK government could negotiate for a separate sovereign state to keep the pound.
"I can't see how it would ever be in the interests of Scotland to sign up to that because it would mean massive restrictions on fiscal policy here in Scotland, on taxing and spending, and it would be very risky for any financial services company based in Scotland.
"The one thing that you can say absolutely is if Scotland leaves the UK it would lead to a lengthy period of instability and uncertainty, which would mean higher interest rates, higher taxes, it would be a hit to the Scottish economy.
"That negotiation on EU membership for Scotland would be very difficult.
"I hope Scotland would eventually be able to be a member of the EU but there would be some tough discussions with Brussels.
"It wouldn't surprise me at all if the message from Brussels was 'you must join the euro'.
"Alex Salmond seems to be saying that he would be willing, if he has to, to have an independent Scottish currency.
"He's also saying that he is going to renege, that he is not going to take on the debt that is rightfully part of Scotland in those circumstances.
"I can't think of a worse way to say to the world and the financial markets, 'Trust me'. It's saying, 'Trust me, but I'm going to walk away from debts and responsibilities'.
"It's a very dangerous debate he's getting into."