Dennis Canavan has admitted the currency union proposal effectively left Westminster with a "veto" over the plan. The SNP is now proposing to change its approach and back a separate Scottish currency after independence.
Mr Canavan chaired the Yes Scotland campaign in 2014 and has called for Nicola Sturgeon to hold a second referendum before 2021 as Brexit turmoil engulfs the UK. And he says that the shortcomings of the last campaign must be addressed. "We ought to be honest enough and humble enough to admit that mistakes were made," he told BBC Scotland's Good Morning Scotland. "The currency thing, for example, turned out to be disastrous. I mean you cannot have a currency union with another partner unless the other partner agrees to that currency union.
"So it was a hostage to fortune, it was giving our opponents - our unionists opponents - a veto over the policy, so that was a mistake.
"I think that lessons have been learned now, that we've got to come up with a better currency option and I'm glad to see that support is growing now and seems to be accepted within the members of the Scottish Government that the idea of an independent currency in Scotland."
Early referendum ‘could kill off Scottish independence’Mr Canavan has recently called for Nicola Sturgeon to seize the initiative and call another independence referendum, given the pro-independence majority among MSPs at Holyrood, combining the SNP and Greens.
"My view for some time has been that we should have a second referendum on Scottish independence within the lifetime of the current Scottish Parliament," he added.
"We could argue that we have a Parliamentary mandate for indyref2."