For the supporters of secession, a federal settlement cannot be enough, quite simply because it is not independence. For the supporters of the status quo, it goes too far, quite simply because it means significant change – and change reaching into the unknown and supposedly alien constitutional territory of federalism at that. My proposal for a Memorandum of Offer on the governance of Scotland according to federal principles tries to square this particular circle. It answers the four key demands that seem to underpin the wish for independence: More self-governance according to Scottish preferences, rather than decisions in Westminster. This would include freedom from London’s perceived dogmas on economic policy and public spending on welfare and social services (austerity), equality, social mobility and education (fees), and immigration (points-based system); Scotland’s voice should be heard more clearly where decisions are taken by the UK’s central institutions; A stronger identity for Scotland in foreign affairs and an end to Scotland’s association with the UK’s nuclear weapons policy; Overall, there is a wish to exhibit pride and confidence in Scottish culture and heritage and the wish to pursue a uniquely Scottish political, economic, social and cultural path. What is proposed meets all of these demands. And yet it retains the security and benefits of continued association with the UK. It also avoids turning the UK into a full federation – anathema for traditional constitutionalists on the unionist side. The one thing not offered in the proposal is fully independent statehood. But the supporters of independence may be hard-pressed to find anything missing in the proposal that is actually needed for Scotland to run its own affairs. Hence, rejecting an option of this kind is tantamount to accepting independence is needed for emotional or symbolic reasons alone. That said, national feelings, often fed over decades or even centuries by perceived political and cultural domination and economic marginalisation, are relevant. Sometimes such deeply held feelings can only be satisfied through independence. The question is whether it is worth paying the price that comes with capturing the emotive label of independent statehood – in this case considerable economic uncertainty and other potential drawbacks. If a solution along federal lines requires compromise from the SNP and its followers, it also requires a change in attitude on the part of the unionist parties. In addition to misunderstandings about the very concept of federalism and its implications for the UK as a whole, there is considerable fear that a federal solution is just a tactical step towards independence. It is true that in some cases federation implies a risk of eventual dissolution of the state. This applies to states which deny that secession could ever lawfully occur. In those cases, federation is feared to enhance the status of the constituent entities, also boosting their claim to eventual separation into the bargain. In the case of Spain, mere devolution was followed by the Catalan independence campaign and it could be argued that it was actually the failure to give full effect to devolution, or to offer a federal alternative, that led to conflict. At any rate, in this case, governance according to federal principles would not add to Scotland’s claim to become independent. It is already accepted by Westminster that independence is a legitimate option if the population of Scotland wishes it. In fact, a federal proposal amounts to an alternative to independence that would – or should – be far more attractive to Scotland than simply offering more of the same. If the opinion polls return to showing strong support for independence, making this offer would probably be the only way to save the Union, rather than risking it. A solution according to federal principles allows the sides to escape from the otherwise binary choice of union or independence. And that binary choice is a supremely risky one, as it means total victory for the one side, and a total loss for the other, depending on the vagaries of public sentiment on the day of the referendum. This feeds antagonism and division, whatever the outcome. On the other hand, settling according to federal principles lets both sides achieve their key aims: significantly enhanced self-governance and status for Scotland with continued union for the UK as a whole. True, one cannot rule out that Scotland might still seek independence after having experienced life according to federal principles for some time. However, this would be a fair way, most likely several decades, into the future. If the solution offered is a generous one, and both sides contribute to making it work, that risk would be reduced. In seeking to address all of Scotland’s concerns, the proposal made here is very generous indeed. Yet, as is necessary when attempting to square a circle, the solution offered, while generous, is finely balanced. On the one hand, Scotland would gain very significantly in terms of self-governance and the exercise of its economic sovereignty. Plus, there would be a strong role for Edinburgh when it comes to running the affairs of the UK where that is in the common interest. And Scotland would gain higher visibility in international relations. On the other hand, to make life easier for the conservatively minded, there is no suggestion the UK should be re-founded as a new federal state. Instead of being suddenly and radically turned into a continental-type federation, the UK would continue as before, with additional arrangements for Scotland according to "federal principles”, as the Memorandum of Offer consistently puts it. The other three nations would be free to remain content with the status quo, seek further devolution, or argue for governance according to federal principles for themselves. The outcome would in effect be what is known as a federacy, or an asymmetrical system combining federal and other elements. It would be as unique to the UK as the present constitutional system, which is without parallel elsewhere. 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