By John Robertson, Scottish Daily Mail

Alex Salmond was dealt a humiliating blow last night by a country that the SNP reveres as proof that an independent Scotland would flourish.

For decades, Nationalists have cited oil-rich Norway as a powerful example of how a separate Scottish state would fare after the break-up of the United Kingdom.

But now, for the first time, a senior Norwegian government minister has heaped ridicule on the claim that the Scandinavian country’s experience bolsters the case for Scottish independence.

Foreign Minister Jonas Gahr Store dismissed the SNP’s core claim, dating back to the 1970s, that Scotland would massively increase its wealth by ‘reclaiming’ North Sea oil reserves.

He expressed the growing anger in Norway over Mr Salmond’s repeated comparisons between the two countries – claiming they threatened to spoil Norway’s relations with the rest of the UK. He said: ‘I would be upset to think Norway’s experience has become a source of division or strife between friends in other countries.’

As the global financial crisis has worsened, Mr Salmond has tried to shore up the economic case for separatism by referring to Ireland, Iceland and Norway as the ‘Arc of Prosperity’. But recession in Ireland and the Icelandic banking meltdown have led critics to rename it the ‘Arc of Insolvency’.

Mr Store also undermined Nationalist claims that oil revenues could be used to bankroll Scotland as well as fund a £200 billion state pension fund similar to Norway’s. Very little oil and gas revenue goes into the Norwegian exchequer, he explained, as practically all profit goes into the pension fund. He said: ‘We don’t consume any of our gas, we export almost all of our production. The money is in a pension fund that will be used for our children and grandchildren.’

Mr Store said the state of industrial decline in which the UK found itself when North Sea oil production began in the 1970s was very different to Norway’s situation. He added: ‘Our social sector and structural system were ready for the big changes. We started with major investments in oil and gas in the 1970s and it was only in the late 1990s that it went into surplus.

The SNP’s argument for the feasibility of independence has long hinged on the claim Scotland would be richer if it could ‘reclaim’ North Sea oil. Mr Shore’s devastating rebuttal leaves that claim in tatters.

A member of a Centre-Left government that took power three years ago, Mr Store said comparisons between Norway and Scotland have some clear limitations. He added: ‘Norway has been an independent state for more than 100 years. We are integrated into the international community, from the UN to Nato, and Norway as a state entity relates to other states.’

He also accused Mr Salmond of misleading the public by praising Norway for ‘bailing out’ its banks – a claim he effectively dismissed as a lie.

The First Minister has repeatedly pointed to a £35billion ‘bank bailout’ by the Norwegian government as evidence that smaller European countries are able to cope in the current economic climate. But Mr Store said the action taken by his government was completely different from Westminster’s £37billion bailout of RBS, HBOS and Lloyds TSB.

He said: ‘We have a financial sector that serves us domestically, with some international outreach. In Scotland, it is different. HBOS and RBS are major institutions with a major international outreach.

‘The Norwegian banks from the outset held a very high standard and the Norwegian government has not bailed out any banks.’

Last night, Scottish Secretary Jim Murphy said: ‘It is now clear that Alex Salmond’s North Sea bubble has burst.’

A Scottish Labour spokesman said: ‘Alex Salmond has hidden behind the ‘Arc of Prosperity’ for too long. Iceland is now in recession. Irish families are facing tax hikes and cuts in health and education, and now the Norwegian government is disowning Salmond’s comparisons.’

An SNP spokesman said: ‘Self-evidently, Norway and Scotland are different countries but we are both enormously energy rich Northern European nations, in terms of renewables as well as oil.

Independence has enabled the Norwegians to make the most of their opportunities and exactly the same applies to Scotland.’

© 2008 Associated Newspapers Ltd.