NICOLA Sturgeon has demanded “absolute clarity” from Theresa May over the UK Government’s plans for a transition period post Brexit, claiming that business confidence has been seriously undermined because of recent comments from UK ministers.

In a letter to the Prime Minister, the First Minister also makes clear Holyrood’s total opposition to a no-deal scenario and that if the UK were faced with such a situation, then “no Brexit” would be the only way forward.

Ms Sturgeon also suggests the Scottish Parliament should be able to take a view on a no-deal scenario, raising the prospect of a possible veto.

The FM notes how for some time she has felt that in the event of Brexit a sensible transition period is essential to allow businesses and governments across the UK and beyond to manage the “profound uncertainties” of the Brexit process and that she welcomed Mrs May’s commitment to a two-year transition period in her Florence speech.

“However, since then, and particularly as a result of your comments in the House of Commons on Monday, the clarity of your intentions, and thus the confidence of business that there will be a sensible transition period agreed quickly, has been seriously undermined. “This relates, in particular, to your comments suggesting no transition can be agreed or formalised until there is agreement on the future relationship.

“I am, therefore, urgently seeking your assurances that you are committed to rapidly putting in place transition arrangements that will meet the needs of business.”

As The Herald has reported Whitehall sources have indicated that a bilateral meeting between the PM and FM is due to take place soon, expected to be next month, to discuss Brexit, including the passage of the UK Government’s flagship EU Withdrawal Bill.

Ms Sturgeon goes on in her letter to say: “Given the differences in recent statements both from you and from those ministers with responsibility for Brexit I believe absolute clarity of the UK Government’s aims in this regard is required and would be welcomed.”

She urges Mrs May to confirm that she is urgently seeking agreement on a transition arrangement of at least two years and securing it by the end of the year based on a “steady state transition” and that she is not making such a move to a transition conditional on a trade agreement before March 2019.

The FM adds: “I am increasingly concerned by the possibility that your negotiations may result in a ‘no deal’ scenario.

“The Scottish Parliament gave a clear view this week that a no-deal situation would not be acceptable and I believe that if the UK finds itself in that position, that no Brexit would be preferable to no deal - or indeed a bad deal - and that each of the Parliaments in the UK must have the opportunity to take a view on that.”

No 10 sources indicated that the PM would reply soon.

In other developments: *the UK was warned that £3 billion of British taxpayers’ money could remain locked into an EU bank for more than 30 years after the country left the bloc. Alexander Stubb, Vice-President of the European Investment Bank - in which the UK has a 16 per cent stake - said the amount would not be fully repaid until 2054. He described Brexit as a “travesty” but denied the move was in any way a punishment.

*Labour leader Jeremy Corbyn has ruled out any support for a second EU referendum, saying Brexit had to be “dealt with by negotiation and by a meaningful vote in Parliament”.

*Tim Farron, the former Liberal Democrat leader, denounced as “reckless” the UK Government decision - confirmed by Lord Duncan, the Scotland Office minister - that Britain would leave the Common Agriculture Policy at Brexit, claiming it would put British farming at risk.

*Brexit Secretary David Davis and former Labour Chancellor Lord Darling are to be quizzed about the prospect of a no-deal scenario next Tuesday by the Lords EU Committee on Brexit.