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UK government seizes on worsening Scottish budget figures

The Saltire (R) and Union Flag fly together in a street before a debate in the Scottish Parliament on ‘Scotland’s future,’ in Edinburgh, Scotland September 18, 2013. REUTERS/Russell Cheyne

LONDON (Reuters) - Scotland's public finances were weaker than those of Britain as a whole for the first time in five years in the 2012-13 fiscal year, giving fresh ammunition to those urging Scots to reject independence.

Figures released on Wednesday by Scotland's chief statistician showed its budget deficit was 12.1 billion pounds ($20 billion) in 2012-13, or 8.3 percent of gross domestic product (GDP), based on a geographical share of North Sea oil revenues as sought by Scotland's nationalist government.

The overall British budget deficit for the same period was 7.3 percent of GDP.

Scotland's budget performance deteriorated largely due to a fall in oil revenues, which were hurt by shutdowns in output in the North Sea.

Scots will vote on independence in a September 18 referendum. Britain's government said the numbers undermined the Scottish government's case that an independent Scotland would be better off outside the United Kingdom.

"Whatever the Scottish government says now, the government of an independent Scotland would be forced to raise taxes and cut public services," Danny Alexander, chief secretary to the Treasury, said in a statement. "We are better off together."

The Scottish government highlighted record levels of investment in the North Sea oil and gas industry as well as in roads, rail, schools and hospitals which would bring in more revenues in the future.

"Those investments, during one of the biggest economic downturns in living memory, have had a short-term impact on Scotland's overall fiscal position - but they are also supporting tens of thousands of jobs and will result in huge benefits to the Scottish economy in years to come," Scotland's finance secretary, John Swinney, said in a statement.

Opinion polls show separatists with about one third of support while about half of Scottish residents oppose ending a 307-year tie with England, but the gap has narrowed this year and up to 15 percent of voters are undecided.

(Writing by William Schomberg; Editing by Ruth Pitchford)