An economic adviser to the First Minister has said the Scottish Government's plan to use the pound after independence "may have been a mistake".

Professor Joseph Stiglitz, a member of Sturgeon's economic advisory council, made the comments in an interview with BBC Radio Scotland.

The professor was also on the board when former First Minister Alex Salmond proposed a currency union between an independent Scotland and the rest of the United Kingdom during the 2014 independence referendum.

Stiglitz asserts the pound was selected as the Scottish Government was seeking a smooth transition but that might have been a mistake.

He said: "The reason they wanted to link the economy to the pound was that they wanted the smoothest transition possible, they wanted to say we can move from the current economic arrangement while keeping our currency and keeping other institutions.

"I think in hindsight that may have been a mistake. It would be a mistake to join the euro, by the way, so what they would have needed to do is perhaps to resurrect the Scottish pound, and let it float.

"Small countries can have their currency. Iceland had one of the deepest downturns in 2008 but had one of the strongest recoveries because it had its own currency."

The American economist believes an independent Scottish currency would "stimulate" the economy and the nation's deficit "would come down".

Despite the Scottish Government insisting it would join a formal currency union, the then-Chancellor George Osborne ruled out any arrangement during the referendum campaign.

In a speech in Edinburgh, Osborne said: "The pound isn't an asset to be divided up between two countries after a break-up like a CD collection.

"If Scotland walks away from the UK, it walks away from the UK pound."

He added: "There's no legal reason why the rest of the UK would need to share its currency with Scotland.

"So when the Nationalists say the pound is as much ours as the rest of the UK's, are they really saying that an independent Scotland could insist that taxpayers in a nation it had just voted to leave had to continue to back the currency of this new, foreign country?"

The Scottish Conservatives' shadow finance secretary Murdo Fraser said the SNP's plans for independence are "falling apart".

He said: ""In the run up to the referendum, Alex Salmond and Nicola Sturgeon promised us the earth, claiming we could have lower taxes, higher spending and keep the pound.

"It was always utterly unrealistic and now, bit by bit, this dodgy prospectus is falling to pieces.

"Professor Stiglitz is the latest in a series of SNP advisers who now see the writing on the wall.

"Leaving the United Kingdom would have massive consequences and ditching our currency would be one of them.

"It's high time those at the top of the SNP now accepted the same and apologised for the way they misled people two years ago."

Sturgeon was questioned on her party's stance on a currency union in London at an EU referendum hustings event in June.

The First Minister said the pound is "our currency" and she believes it is " the currency I think we should continue to use" after independence.