By Maria Golovnina
EDINBURGH (Reuters) - Scotland takes a big step on its path towards an independence referendum on Monday when its leader meets Britain's prime minister to finalize arrangements for a vote which could lead to the demise of Scotland's three-centuries-old union with England.
Scotland's drive for sovereignty, led by its nationalist leader Alex Salmond, echoes separatist moves by other European regions such as Catalonia and Flanders at a time when a crisis-hit European Union undergoes deep changes to its identity.
Expected to be signed in the Scottish capital of Edinburgh, the deal will allow Scotland to decide in a 2014 referendum whether it should become an independent country or stay within the United Kingdom.
Nationalists have timed the vote to coincide with the 700th anniversary of the Battle of Bannockburn when Scottish forces led by Robert the Bruce defeated English invaders.
Prime Minister David Cameron opposes Scotland's push, arguing that Britain is stronger together. But London agrees it is up to Scotland to decide its future for itself in a vote.
"There are many things I want this (government) to achieve but what could matter more than saving our United Kingdom?" Cameron said in a speech last week. "Let's say it : We're better together and we'll rise together."
Following months of negotiations, both sides have made major concessions to pave the way for the final accord to be signed on Monday by Cameron and Salmond at Edinburgh's St Andrew's House - the seat of the Scottish government.
"The agreement will see Scotland take an important step toward independence, and the means to create a fairer and more prosperous Scotland," Salmond said ahead of the meeting. "I look forward to working positively for a yes vote in 2014."
Scotland already has many of the trappings of an independent nation such as its own flag, legal system, sports teams, as well as a distinctive national identity following centuries of rivalry with its southern neighbor.
London argues an independent Scotland - home to about five million people - would struggle to make ends meet as the bulk of its current funding comes from a 30 billion pound ($48 billion) grant from the UK government.
But one of the most contentious issues at stake is the ownership of an estimated 20 billion barrels of recoverable oil and gas reserves beneath the UK part of the North Sea.
Britain is also worried about the future of its nuclear submarine fleet based in Scotland which says there would be no place for atomic arms on its soil following independence. Moving the fleet elsewhere would be costly and time-consuming.
Many Scots themselves are unconvinced. Opinion polls show only between 30 and 40 percent of them support independence - a range that has changed little as negotiations intensified.
"Independence is about Scotland leaving the UK, becoming a separate state, taking on all the burdens and risks that go with that and losing the benefits and opportunities that we have as part of the UK," UK Scottish Secretary Michael Moore told the BBC on the eve of the meeting in Edinburgh.
"When we look at the economy, at defense, at our place in the world, on all these big issues, people across Scotland will continue to support Scotland being in the United Kingdom."
Scotland and England have shared a monarch since 1603 and have been ruled by one single parliament in London since 1707. In 1999, for the first time since then, a devolved Scottish parliament was opened following a referendum.
INTRIGUE OVER WORDING
Both sides have been tight-lipped on the contents of the final agreement, with much intrigue and speculation surrounding sensitive issues such as how to phrase the referendum question.
Salmond is expected to have accepted London's demand that there should be only one straight-forward "in or out" question on whether voters want to be part of the United Kingdom.
He had earlier campaigned for a second question on whether Scotland should be given more powers in the so-called "devo max" form of enhanced devolution that stops short of independence.
For its part, London is likely to agree to allow Salmond to lower the voting age to 16 from Britain's countrywide 18 - a coup for Salmond who believes that young people are more likely to vote overwhelmingly in favor of independence.
"(The) agreement will ensure that the decision taken by the people of Scotland is one that will be fully respected by both governments," Scotland's Deputy First Minister Nicola Sturgeon said ahead of the meeting. She would not elaborate.
"The referendum is the biggest opportunity the people of Scotland have had for 300 years to determine the kind of nation we all wish to live in."
But for Salmond, convincing his people to support independence remains an uphill task given tough economic times.
There are concerns as to what would happen to Scotland's debt or whether it would automatically become an EU member.
A former oil economist, Salmond says Scotland would be prosperous, entitled to the lion's share of North Sea oil revenues and that it should be able to borrow at rates no worse than London, should people vote "yes".
(Additional reporting by Isla Binnie in London, Writing by Maria Golovnina, Editing by Rosalind Russell)