Nicola Sturgeon has been accused of being “wholly distracted” by her bid for a new independence referendum amid warnings that Scotland is “halfway to recession” under the SNP, with its economy trailing behind the UK.

Damning figures revealed that the economy contracted by 0.2 per cent over the last quarter of 2016, while in the rest of the UK the economy grew by 0.7 per cent.

Over the whole of last year, Scottish GDP was up 0.4 per cent, compared to a figure of 1.8 per cent for the UK.

The Scottish Conservatives said that if the performance was mirrored in the first quarter of this year Scotland would officially enter recession.

Business leaders demanded urgent action from SNP ministers and called on them to ditch their high tax regime.

The economist Prof John McLaren said the performance must be remedied “as soon as possible”, but warned the outlook was bleak because of the uncertainty around Brexit and talk of a second independence vote.