Theresa May is reportedly preparing for a second Scottish independence referendum in 2018.

It is understood that the Prime Minister believes Nicola Sturgeon will call for a second referendum vote in August next year and is already preparing a campaign strategy.

The Courier reported that Downing Street is currently working with the Scottish Conservatives to arrange key meetings with the SNP to 'lay the foundations' for a second referendum.

Read more: Video - Tories to block Nicola Sturgeon's bid for second independence referendum

A Scottish Conservative insider told the Courier that the preparations were being put in place to ensure the Tories are 'prepared' and 'calm and collected ahead of any negotiations'.

Downing Street sources stated that Ms Sturgeon would need agreement from Westminister to hold a second referendum but confirmed that 'contingency' talks are taking place.

The First Minister said that she would decide whether to hold a second referendum in the coming weeks after Ms May promised to follow a 'hard' Brexit that will take the UK out of the European Single Market.

However, Defence Secretary Michael Fallon said last week that the UK Government could block Holyrood from holding a new vote on independence.

Read more: Video - Tories to block Nicola Sturgeon's bid for second independence referendum

He told The Herald that Ms Sturgeon did not have a mandate to stage another independence vote and could 'forget it'.

Scots voted to 45 per cent to 55 per cent to remain in the UK during the first independence referendum in September 2014.