Madrid (AFP) - The regional leader of Spain's Basque Country, where nationalist sentiments run high, urged Madrid on Sunday to allow independence referendums like those held in Scotland and Quebec.

The comments by Inigo Urkullu come as Catalonia's separatist leaders plan to hold a referendum banned by Madrid on October 1, although whether this will happen remains to be seen given the measures taken by Spain's central government and the courts to stop it.

"In the eyes of the world, the Spanish government is part of the problem and not the solution," Urkullu told members of his Basque Nationalist Party (PNV) near Vitoria in northern Spain.

Judges and prosecutors have fined and detained key members of the team organising the vote, and threatened to charge people who organised protests last week with sedition.

Police have seized close to 10 million ballot papers as well as other items for the referendum.

Madrid, which argues that a referendum violates the Spanish constitution, has also tightened control over Catalonia's finances.

This has increased resentment in the region and led to claims by its leaders that Madrid has imposed "an undeclared state of emergency".

Urkullu said the Spanish state was "lost in its labyrinth" and that it had "failed".

"A starting point would be to recognise the existence of two nations (the Basque Country and Catalonia) who want to decide their future democratically, freely and with guarantees," he added.

The Basque Country is still marked by decades of violence once waged by armed separatist group ETA, but the peaceful desire for independence remains strong.

"We have the right and the capacity to decide our future.

"The model is Scotland, or rather the United Kingdom which accepted its pluri-national reality and accepted that Scotland decide its future democratically and freely" in 2014, he said.

Urkullu also cited the "Canadian model" that allowed Quebec to hold referendums in 1980 and 1995.

Both the Scots and Quebec rejected independence.

The sharp criticism comes at a time when the conservative government of Prime Minister Mariano Rajoy needs the support of the PNV in parliament to approve the 2018 budget.