Claims from Work and Pensions Secretary Iain Duncan Smith that an independent Scotland could not afford to pay its welfare bill were branded "offensive, nonsensical rubbish" by First Minister Alex Salmond.
Mr Duncan Smith is expected to say in a speech in Glasgow that a break-up of the Union would leave Scotland unable to meet the cost of getting people into employment or adequately supporting those who cannot work, without cutting services or raising taxes.
Welfare spending is 6% higher north of the border, and any additional income to the Scottish Government from North Sea oil and gas revenues would not be enough to meet the costs, the Work and Pensions Secretary was due to say.
But his claims were branded "scaremongering" by the Scottish National Party.
Mr Salmond, who was in London for talks with Prime Minister David Cameron and leaders of other devolved administrations, said Mr Duncan Smith had got his figures wrong, telling BBC News: "We contribute 9.6% of the UK's taxation, with 9.3% of the spending and just over 8% of the population.
"That is a relative surplus of about £2.7 billion in 2010/11, or £500 for every man, woman and child in the country.
"The welfare bill is not financed out of North Sea oil, it is financed out of general taxation."
Mr Salmond said that a Scottish Parliament committee heard from a blind man who said he was being "reduced to penury" by welfare cuts introduced by Mr Duncan Smith, adding: "The man responsible for that has got the audacity to come to Scotland and tell us we couldn't afford to have a compassionate and proper welfare protection."
"We could have less borrowing, more spending and we would certainly be able to sustain a position where we didn't reduce people with blindness to penury, as Iain Duncan Smith is currently doing in Scotland."
Speaking ahead of the address to the Welfare to Work Scotland conference, Mr Duncan Smith said the new universal credit being launched next year will make a "radical" difference to getting people back into the workplace in Scotland and the rest of the UK. Under the scheme there will be a single monthly benefit payment, rather than weekly or fortnightly as at present, for people looking for work or on a low income.