The Westminster establishment is resorting to "destructive campaigning" in an attempt to frighten Scottish voters from supporting independence with untrue scare stories about a currency union, Alex Salmond has said.

In a hard-hitting speech, the Scottish first minister also accused the European commission president, José Manuel Barroso, of challenging the "European ideal of democratic expression" after he questioned whether an independent Scotland could join the EU.

Salmond hit back in a speech to Business for Scotland in Aberdeen after a challenging week in which George Osborne ruled out a currency union with an independent Scotland and Barroso said it would be "difficult, if not impossible" for it to join the EU. Barroso said EU members, such as Spain, which are nervous about autonomous regions breaking away would be prepared to block Scottish membership.

The first minister rejected Barroso's comments and said EU member states would be keener on negotiating with a pro-European Scotland than with a Eurosceptic UK seeking to renegotiate EU membership terms, which would be the case if the Conservative party won the 2015 general election.

Salmond said: "The decision is one for member states, but not to recognise the democratic will of Scotland would run counter to the entire EU European ideal of democratic expression and inclusion.

"It would pose a challenge to the integrity of the European Union even greater and more fundamental than the threat of British withdrawal. That is why no member state has suggested that it would seek to block Scottish membership."

The first minister said he thought Osborne had made one of the biggest mistakes of the pro-UK campaign when he rejected a currency union with an independent Scotland.

The chancellor said in Edinburgh last Thursday that the most senior Treasury civil servant, Sir Nicholas Macpherson, had advised him that a sterling union would be unworkable, unstable and damaging to both countries.

Salmond said: "No-one with a semblance of understanding of Scottish history and indeed the Scottish character would have made a speech such as that. To be told that we had no rights to assets jointly built up is as insulting as it is demeaning.

"To be told that there are things we can't do will certainly elicit a Scottish response that is as resolute as it is uncomfortable for the no campaign – it is 'yes we can'. It is a sign of just how out of touch and arrogant the Westminster establishment has become."

The first minister accused Osborne, Ed Balls and Danny Alexander, who also rejected a currency union, of a "casual Westminster dismissal" of the findings of the Scottish government's fiscal commission. This set out how financial regulation would work, suggesting there would be no need – as Osborne said – for a banking union.

The commission also said a stabilisation fund should be established to lessen the shock of a fall in oil prices. Osborne said the instability of oil prices would heighten the need for fiscal transfers between the rest of the UK and an independent Scotland.

Salmond said there was no legal basis for the chancellor's assertion that Scotland would be in default if it declined to take on a share of the UK's liabilities.

Professor Christine Bell of Edinburgh University said last week that if the UK does, as it said it would, assume responsibility for all UK debt then "it keeps its liabilities for the debt".

Salmond was also scathing about the way in which Labour endorsed the rejection of a currency union. He said: "This isn't just the Tories – sadly we have come to expect it from the Conservatives. But the sight of the Labour shadow chancellor reading from a script prepared by George Osborne was too much to bear for many Labour supporters in Scotland.

"For Alistair Darling's former election agent it was the straw which broke the camel's back and made him declare for a yes vote. I predict that moment will prove to be one of the Westminster Labour leadership's biggest misjudgments."

The first minister also criticised Osborne for suggesting an independent Scotland would be a "foreign country" to the rest of the UK. He said: "Let me be clear. For Scots whether independent or not, the rest of the UK will never be foreign."

He said the 1948 Ireland Act, "negotiated after infinitely more difficult circumstances than we have, specifically states that Ireland is not to be regarded as a 'foreign country'. And so despite the chancellor's campaign rhetoric I don't believe his 'foreigner' language represents any significant view in Scotland or indeed England, Wales and Northern Ireland."

Salmond added: "I want to emphasise that contrary to the destructive campaigning style and rhetoric of the Westminster establishment, the Scottish government will continue to be constructive and positive about the future of this country."

Osborne said in response to Salmond's speech: "We were promised a detailed response to the economic arguments that I, the chief secretary and the shadow chancellor made last week, but instead we got an empty speech.

"It's now even clearer that Alex Salmond is a man without a plan. Detailed analysis and independent advice shows clearly that what is best for Scotland is keeping the stable and durable currency union we have now. The only way to do that is to keep the UK together. If Scotland walks away from the UK it walks away from the pound."