BETTER Together’s Project Fear approach in the independence referendum was “absolutely appalling” and generated an avoidable backlash, Tory peer Lord Michael Forsyth has admitted.

The former Scottish Secretary attacks the No campaign in the latest instalment of Andrew Marr’s documentary ‘Scotland and the Battle for Britain’ which is broadcast tonight.

The programme also features Nicola Sturgeon saying she was most worried about a positive Unionist campaign in 2014 featuring “the great things about being British” - but it never happened.

“I could have made a better fist of it than those who ran the No campaign made,” the First Minister says.

The term Project Fear started life as an ironic nickname coined by Better Together about itself, but was seized upon by the Yes campaign as symbolising all that was wrong with the No side.

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One example in the documentary is then Tory chancellor George Osborne refusing to let an independent Scotland share the pound.

Forsyth, one of Margaret Thatcher’s favourite ministers, says: “It was absolutely appalling.

“I was regularly telling George Osborne to stop running a negative campaign, to stop telling the Scots that they were too wee and too poor to run their own affairs, that they couldn’t have the pound.

"It simply wasn’t credible. We started off in that campaign with only 28 per cent supporting independence and we ended up with 45 per cent.”

He said he was “astonished” that instead of learning the lessons of 2014, Osborne and his fellow Remain campaigners “used the same playbook in the Brexit referendum with similarly catastrophic results - from their point of view”.

The programme also explores the economic case for independence given the oil price slump and recent SNP Government figures showing Scotland had a £15bn deficit in 2015-16.

Sturgeon says independence is not a panacea but insists the Scottish economy has “vast potential” and it is always better to be in charge of economic decision-making than not.

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But Alex Bell, a senior policy adviser to Alex Salmond from 2011 to 2013, says: “If you rely simply on the revenues of Scotland, you are most likely to have less money to spend. Therefore the first rule of independence has to be that you accept an economic shock of some dimension.

“It may not be that bad. But until someone takes the trouble to investigate it seriously, and we discuss that, the case is dead.”

On Scotland’s oil economy, Sir Ian Wood, chair the Wood group, says the fall in the oil price from $110 a barrel in 2014 to below $50 today has had a huge impact.

“I think there’s a realisation now that the golden goose is no more. We had 450,000 jobs across the UK. We think it’s now down to about 380,000. That’s a big big reduction.

“It [the price] will vary up and down a bit. I think 2016 will be a bad year. It’ll be a very tough year. There will be a lot more jobs lost because we’re still going through a very difficult phase.”

On Brexit, Sturgeon repeats her belief that it makes Indyref2 likely within the two-year Article 50 withdrawal process.

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“I think an independence referendum is likely here and the logic would be, if it’s coming about because of Brexit, that it’s in the period before the UK leaves. But we don’t know when that two year period is going to start.

"We don’t yet know whether that two year period will both see the UK leave the EU and negotiate its new relationship, or whether that two years will just be for Brexit, so there are so many unanswered questions for the UK as a whole right now.”

Marr wonders whether the SNP can wait much longer for a second ballot before political gravity kicks in and the party starts to lose power, making a referendum impossible.

Scotland and the Battle for Britain is broadcast at 8pm on BBC2