Gordon Brown will propose a third option of giving Scotland vast new powers in exchange for remaining in the UK.
During a speech in Fife the former PM will suggest giving Holyrood the authority to sign treaties with other European countries and set VAT.
H
e will also call for EU powers to be repatriated to the Scottish Parliament, Welsh Assembly and the regions not Westminster.
Gordon Brown That would give Scots control after Brexit of the £800m they currently contribute to the EU.
As Nicola Sturgeon prepares to ramp up her rhetoric at the SNP spring conference, Mr Brown will outline a compromise he believes suits everyone.
He will say: With these proposed new powers let us send a message today and I will fight for this in the weeks and months ahead that from now on the debate on the future of Scotland will no longer be limited to two options.
The third option, a patriotic Scottish way and free from the absolutism of the SNP and the do-nothing-ism of the Tories is now essential because post-Brexit realities make the status quo redundant and require us to break with the past.
The status quo has been overtaken by events, because unless powers now with the European Union are repatriated from Brussels to the Scottish Parliament, the Welsh Assembly and the regions, Whitehall will have perpetrated one of the biggest power grabs by further centralising power.
He will add: The third option would give Scotland the benefits of being in Britain while positively seeking and securing the closest possible ties with Europe.
Mr Brown also wants the Bank of England to become the Bank of England, Scotland, Wales and Northern Ireland – with staff representing all parts of the UK.
But his intervention is unlikely to satisfy Mrs Sturgeon, who will warn Theresa May that she will shatter beyond repair the notion that the UK is a partnership of equals if she refuses a referendum.
MSPs are expected to back her bid for a second poll on Wednesday.
The SNP leader announced this week that she will seek an independence referendum between autumn 2018 and spring 2019 though she will tell party members in Aberdeen that she is happy within reason to talk about the timing.
But she will add: If a majority in the Scottish Parliament endorses that position, the Prime Minister should be clear about this.
At that point a fair, legal, agreed referendum on a timescale that will allow the people of Scotland an informed choice ceases to be just my proposal, or that of the SNP.
It becomes the will of the democratically elected Parliament of Scotland.