Alex Salmond on Tuesday promised that Scottish independence would lead to a jobs boom and a resurgent economy, boosted by far greater control over the country's tax and investment policies.

The first minister said that allowing Scotland to control its own economic and industrial policies would lead to small but important boosts in growth, allowing Scotland to create tens of thousands of new jobs.

In a calculated rebuff to damaging predictions by the Institute for Fiscal Studies about the economic risks of independence, he said that just a 1% increase in productivity would create 23,000 new jobs in the long term.

Targeted tax changes such as cutting corporation tax in Scotland to 3% below the UK rate would allow it to compete against the pull of London and south-east England, and potentially create 27,000 jobs. Further tax breaks would help Scotland's hi-tech and creative industries.

Salmond was speaking in Dundee as he launched a 200-page paper, Economic Policy Choices in an Independent Scotland, a week before he unveils his long-awaited white paper on independence next Tuesday.

He said Scotland's growth had been stifled by UK governments led by all three UK parties. In comparison, other small independent European countries had enjoyed average annual growth 0.6% greater than Scotland over the 30 years to 2007.

Salmond said: "The one-size-fits-all economic policies of successive Westminster governments have failed and are continuing to fail the people of Scotland.

"We perform well at the moment but we should be doing so much better. A simple glance at many other European countries of similar size to Scotland, some without the natural advantages Scotland has, shows that we have lagged behind their growth rates for decades. Independence will give us the chance to build an economy that takes advantage of Scotland's unique strengths and size to deliver a more outward-focused, fair and resilient economy, boosting revenues and creating many thousands of more jobs."

Alistair Darling, the former Labour chancellor and chairman of the pro-UK Better Together campaign, said Salmond was ignoring evidence from the IFS that Scotland's debt burden and high public spending would immediately force an independent government into making tough choices on tax and spending.

"The nationalists have chosen to ignore reality and to offer up a type of fantasy economics that beggars belief. Instead of admitting the obvious challenges caused by the rise in the number of elderly people, the fall in the number of people of working age and the eventual decline in North Sea oil, the nationalists have reverted to type. Their response is to deny that there are any problems and to say, yet again, that the experts are wrong," Darling said.

"Their paper today seems to be telling people that the best way to respond to the warning from experts [is] to make unfunded promises of business tax cuts. It just doesn't make any sense. It wouldn't solve the problem. If anything, it would make it worse.

"Next week we will finally see the white paper. If it ignores independent analysis, is full of uncosted promises and relies on the head-in-the-sand economics we are seeing today then it won't be worth the paper it is written on."

The Scottish government document, designed as a scene-setter for next week's independence white paper, said greater autonomy would allow Scotland to "rebalance" its economy, use targeted immigration measures to attract skilled workers, and reform welfare and employability policies.

The Scottish National party will also promise tax breaks targeted at small- and medium-sized businesses and incentives to boost employment and investment, while introducing wider reforms to simplify the entire tax system.

Prominent economists and the pro-UK parties insist, however, that Salmond's ability to compete significantly with the rest of the UK would be significantly restrained if Scotland set up a sterling currency zone with the UK and had the Bank of England as its central bank.

The UK government and Bank of England would be likely to require a deal on tax policy and borrowing and also control sterling interest rates to ensure Scotland's economy did not threaten sterling's value or the UK's economic interests.

Willie Rennie, the Scottish Lib Dem leader, said the economics paper was a 200-page collection of groans and gripes. "Today they want tax cuts for big business. Last week they wanted big increases in welfare spending. Everyone can see it doesn't add up," he said.

"The SNP have just seven more days to get their sums to add up and for honest answers to be put in the white paper."

It was welcomed by the Scottish Green party, however, as proof that Scotland had an opportunity to design a wholly new economy both at the referendum in September 2014 and at the Scottish elections in 2016.

Patrick Harvie, the Scottish Green co-leader, said: "Instead of seeing the obscene gap between the rich and the rest continue to grow, Scotland's top priority should be to build a truly sustainable economy.

"Since the financial crash, Greens have warned against simply trying to get back to business as usual, and it's vital that an independent Scotland avoids repeating the mistakes of successive governments in the UK. With the independence option on the table we have a real chance to transform and rebalance our economy."