SCOTTISH firms will begin a jobs exodus within months to avoid the Brexit "cliff-edge", one of the country’s leading economists has warned.

Professor Anton Muscatelli said businesses would move evermore operations abroad early next year to prepare for a "no deal Brexit", leaving the EU without a trade agreement.

As divorce negotiations stall and vital trade talks remain on the distant horizon, senior Tory figures have repeatedly hinted that they would be happy to quit Europe without reaching agreement.

Prof Muscatelli, the principal of Glasgow University who chairs the Scottish Government’s panel of experts on Brexit, suggested this prospect meant a current trickle of banking jobs to Ireland – and the continent could turn a at trickle in to a torrent.

His warnings, backed by leading voices in the financial services industry, which said it would not bring relocated jobs back if there was a last-minute Brexit deal.

Writing for the Scottish Centre on European Relations (SCER) think tank, Prof Muscatelli said: “British business are quietly, but much more firmly than before, explaining to the UK government that time is running out.

“For them the cliff-edge is not March 2019, but early 2018 when contingency plans have to be executed.

“Most financial services companies have made these contingency plans, and many tell me that they are stepping these up plans from ‘Brexit-min’, where they were moving some minimal operations to take advantage of being inside the single market in the case of a ‘cliff-edge’, to ‘Brexit-max’, i.e. plans to scale up operations significantly in Frankfurt, Dublin and elsewhere.

“Once gone, these jobs will not come back if, following a cliff-edge Brexit, we seek ex post facto to recover the situation.”

Several high-profile businesses have already signalled modest moves.

Anton Muscatelli

Royal Bank of Scotland, for example, has already said it will transfer hundreds of jobs to Amsterdam. In England, insurance giant Lloyd’s of London has said it will move its EU base to Dublin.

Scotland’s financial services lobby warned that relocations would have to take place “sooner rather than later”.

Firms, insiders stress, cannot risk waiting for clarity to emerge from talks: it takes too long to set up offices overseas.

Graeme Jones, chief executive of Scottish Financial Enterprise, said: “The reason behind firms having to potentially deploy these plans soon relates to the lead times associated with setting up subsidiaries in Europe.

“The need to do this only applies to those financial services companies where the underlying operating model of the company requires a subsidiary to be set up. Some already have these in place.

“Changes of this order of magnitude always take time and effort and it is the lead times required that generate the need to take action sooner rather than later.

“Individual company plans will already be in place to make sure they can continue to serve their customers in Europe and indeed it is a regulatory requirement to have plans in place to mitigate against the risks associated with Brexit.”

Mr Jones’s warnings were echoed by a City lobby in London which said financial firms would pull the trigger on “irreversible” Brexit job relocations in the new year unless the Conservatives agree a transition deal imminently.

Miles Celic of TheCityUK, said: “EU and UK negotiators cannot delay discussing a transitional deal any longer if they want it to hold any real value.

“Firms are beyond the planning stage now. If they haven’t done so already, most will be ready to press go on their contingency plans in the new year.

“They can still take their foot off the accelerator if a transitional deal is agreed, but without progress soon, it may be too late. Once businesses start moving, there is no reverse gear. It is simply not efficient or economically viable to move operations twice.”

TheCityUK believes that 75,000 jobs and £8 billion to £10bn in annual tax revenues are at risk if the UK crashes out in 2019 without a deal and has to fall back on World Trade Organisation (WTO) rules, which, crucially, do not cover services.

British businesses fear tariff and non-tariffs barriers to trade in services, in which the UK has a surplus.

They have already pressed the Government to agree a transition period, with divorce talks with the EU having so far failed to advance.

Prime Minister Theresa May early this year said “no deal is better than a bad deal” but last month appeared to open the way up for a longer transition. Brexit watchers have tried to understand signals coming out of UK government with ministers appearing to have different emphases.

Another Scottish EU expert, Kirsty Hughes, the director of SCER, last week said a “no deal Brexit” – which has been linked with mass job losses and food shortages – would likely trigger new calls for a second referendum on Scottish independence.