Speaking in Brussels, Michael Russell, Scottish minister for culture, external affairs and the constitution, said options ranged from "maintaining the current arrangements, through to greater devolution" of powers to Scotland within the United Kingdom.
This, he added, might resemble a federal system similar to that in Spain or Belgium, "or full independence".
"Independence is the best option to move Scotland forward, allowing us to take a full and active role in the international community," claimed Russell, whose Scottish National Party (SNP) leads the devolved government there.
"I believe we are at a key moment in Scotland's story".
'National conversation'
The paper on Europe and foreign affairs is one of a series that the Scottish government has published during its 'National Conversation' programme, which it has been running for the last two years and has primarily included town hall meetings between politicians and local populations across the country.
The government says its aim is to spark discussion on key issues for Scotland and lay out future options for the country.
The government will release other papers on similar topics in the run up to St. Andrews Day, Scotland's national day, when it will release a second white paper, in which it will set out the case for independence and lay the ground for a referendum on the issue, which its plans to set for 2010.
The minister strongly defended the Scottish government's National Conversation programme, saying it was "stimulating discussion" and the population had "lacked information up until now". He said none of the politicians who are against the programme or Scottish independence "have been to a single National Conversation meeting".
Fisheries and energy policy
The recent paper claims that "fisheries is a vital industry for Scotland," as the majority of the UK fishing quota and fishing capacity is in Scotland - about one fifth of the total within EU waters. Therefore Scottish ministers should lead the UK representation in EU fisheries negotiations, it argues. However, since the interests of Scottish fisherman and those in the rest of the UK could "differ significantly," independence would be the only way to ensure their interests could have "with a separate, distinct voice within Europe".
Another area of contention for the Scottish government is energy policy. The paper says that due to locational transmission charging by national energy regulator OFGEN and the National Grid, there is "an inbuilt bias in the UK transmission system against all Scottish-based [energy] generation". An independent Scotland "would push for the development of infrastructure to encourage renewable generation," says the government. There is also the issue of the substantial tax revenues from oil and gas, which currently go into the UK's coffers in London.
In terms of EU representation, there would be an increase in the number of Scottish MEPs if Scotland was an independent EU member state, argues the Scottish government. Denmark, with a population of 5.5 million, is a similar size to Scotland, yet Denmark has 13 MEPs. There are only six UK MEPs representing Scotland.
Applying for EU membership?
The government, led by the Scottish National Party (SNP), also claims that the increase in foreign diplomatic representation in Scotland would create hundreds of jobs and benefit the economy by tens of millions of pounds. Overall, independence would not impose a net cost on the Scottish economy in terms of foreign service activities, the SNP argues. There have been questions though whether an independent Scotland could perform as well economically as it currently does as part of the UK.
Some have also raised the issue that Scotland, separated from the UK, would have to apply for EU membership as a new member state. Russell dismissed the suggestion, declaring that the "EU would not want in any extent to exclude" Scotland. Two new member states would succeed the UK, he believes. "What message would that send" about the character of the EU, if a democratic, developed and enthusiastic country, whose population has been part of the EU for decades, was excluded, he added.
Asked by EurActiv whether an independent Scotland would consider joining the euro, the minister said "sympathy was there" for joining the monetary union, but that he would not prejudge the position of any future independent government.
