A furious behind-the-scenes row has prompted Downing Street to disown a proposal to designate as sovereign UK territory the Scottish naval base that hosts Britain’s Trident nuclear deterrent, in the event of Scottish independence.

No 10 rushed out a statement saying that it was neither “credible or sensible” to give the Faslane base the same status as the British sovereign military bases in Cyprus, following an argument involving senior members of the cabinet and the former chancellor Alistair Darling.

Amid an angry reaction from the Scottish National party (SNP), which drew parallels with Saddam Hussein’s annexation of Kuwait, a No 10 spokesman said: “This government has not commissioned contingency plans over Faslane. No such ideas have come to the secretary of state or the prime minister. They would not support them if they did. It is not a credible or sensible idea.”

Downing Street swung into action after Darling, who heads the pro-UK Better Together campaign, telephoned No 10 on Thursday morning to warn about the impact of a report in the Guardian about the Faslane base on Gare Loch in Argyll and Bute.

The Guardian reported that Ministry of Defence officials were starting to examine plans to designate the Faslane base as a Sovereign Base Area along the lines of its military bases in Cyprus.

The report dominated the morning lobby briefing in No 10, usually chaired by David Cameron, after the MoD confirmed the report in an email to the BBC late on Wednesday night.

A decision was taken to try to kill the story after the unit in No 10, run by Andy Dunlop who co-ordinates the government’s handling of the independence referendum, issued a stern warning that the sovereign base idea was a gift to the SNP.

One source close to a senior cabinet minister said of the MoD’s interest in the sovereign base idea: “What a ridiculous thing to say. Talk about handing a gift on a plate to the SNP.”

The SNP accused Westminster on Wednesday night of seeking to bullyScotland. Speaking during the weekly session of business questions,Angus MacNeil, the SNP MP for Na h-Eileanan an Iar said: “May we have a debate on the dangers and evils of imperialism and annexation of another country’s territory, whether it be Saddam Hussein in Kuwait or, at the other end of the spectrum, the Westminster government who, as the front page of the Guardian reports, are bullying Scotland as part of ‘project fear? Free peoples across the world will condemn that and stand with Scotland in the name of freedom.”

Darling was understood to be particularly concerned because he feared that the MoD’s proposals for Faslane would undermine the central theme of a major lecture he gave at the University of Glasgow on Thursday on the referendum. The former chancellor he said he wanted Scots to make a positive choice to remain in the UK and “not merely to reject the risks and uncertainties of independence”.

It is understood that a senior official from Darling’s Better Together campaign telephoned the No 10 Scottish referendum unit late on Wednesday night to express deep alarm about the Faslane plan. The group was assured that the No 10 unit was equally appalled that the private thinking of the MoD on such a sensitive matter had entered the public domain.

One source in the Better Together campaign said: “We phoned Downing Street to bluntly ask what was going on. They were already on to it.”

Darling, who called No 10 himself, showed his irritation after his speech in Glasgow. Picking up on the submarine theme, he said: “It was a row that quickly surfaced and equally quickly it was sunk. It was a frankly ridiculous proposal to suggest we could possibly designate part of Scotland as different from the rest. I am glad the UK government has hit it hard on the head – that’s exactly what it deserved.

“Any normal person looking at it for more than 10 seconds would come to the view that this was something that should just go straight into the bucket.”

The Guardian reported on Wednesday night that MoD officials were starting to examine plans to ensure that the Vanguard submarines could remain at the deep-water Faslane base and nuclear warheads could continue to be stored at the nearby Coulport base on Loch Long. The Guardian reported that, ahead of next year’s referendum, the MoD was officially working on only one option for the Faslane base – a defeat for the SNP. An MoD spokesperson told the Guardian: “No contingency plans are being made to move Trident out of Scotland. The scale and cost of any potential relocation away from Faslane would be enormous.”

But a defence source said the idea of designating Faslane as sovereign UK territory in the event of an SNP victory was being taken seriously. The source said: “It would cost a huge amount of money, running into tens of billions of pounds, to decommission Faslane. Those costs would be factored into any negotiations on an independence settlement. The sovereign base area is an option. It is an interesting idea because the costs of moving out of Faslane are eye wateringly high.” A version of this was emailed to the BBC, which ran a story on its website with the headline: “Faslane Trident base could be in UK after Scottish independence”. The MoD emailed the BBC to say: “The sovereign base area is an option. It is an interesting idea.”

Source – The Guardian