Rehn, in a letter to the UK coalition government's chief secretary to the treasury, Danny Alexander, said that Scottish proposals to keep using the pound as the country's main currency without agreeing a formal currency union with the rest of the UK - so-called sterlingisation - was incompatible with EU membership rules that state that member states must have a "competent monetary authority in the form of an independent central bank."
Rehn's letter and comments were trumpeted by Alexander as a failure of the Scottish government "to put forward a credible currency plan and the dangers it poses to the people of Scotland".
But, Scottish government finance chief, John Swinney attacked Alexander and the content of Rehn's letter, saying that, "Only a week ago, the no campaign were claiming Scotland would have to join the euro, now they are saying we wouldn’t even get into the EU. They should at least try and keep their scaremongering consistent."
"EU membership requires that you have to have financial institutions such as a monetary institute, which is contained within our [independence] proposals. An independent Scotland will be able to keep the pound."
Swinney added that, "The only threat to Scotland’s place in Europe is the plan for an in-out referendum from a Tory Government dancing to UKIP’s tune, which is propped up in power by Danny Alexander and his Liberal Democrat colleagues."
However, David Martin and Catherine Stihler, Scotland's senior Labour deputies in the European parliament, told the Parliament Magazine that they both agreed and supported Rehn's comments that the Scottish government proposals arguing the case for using the pound as its currency without the consent of the other members of the UK "would simply not be possible"
"Olli Rehn is a man who knows what he is talking about," said Stihler, adding, "He is right to say that an independent Scotland would face the choice of using the pound unilaterally or being a member of the EU."
"I am glad to see Rehn agree with what I have been saying all along – that an independent Scotland would have to apply to join the EU using the normal procedures and meet all necessary criteria" Catherine Stihler MEP
"I am glad to see Rehn agree with what I have been saying all along - that an independent Scotland would have to apply to join the EU using the normal procedures and meet all necessary criteria."
Meanwhile Martin told the Parliament Magazine that he agreed, "100 per cent with my colleague Olli Rehn, an independent Scotland could not join the EU without access to an independent central bank and would not be able to keep the pound without the consent of the Westminster government."
With a new opinion poll showing that the upcoming Scottish referendum result is now on a knife edge, both pro and anti-independence supporters are turning to EU membership as a potential deciding factor in winning over undecided voters.
A YouGov poll for the UK's Sunday Times Newspaper saw a 22-point advantage by the pro-union Better Together campaign collapse, propelling the pro-independence 'Yes' campaign into a two point lead.
"An independent Scotland could not join the EU without access to an independent central bank and would not be able to keep the pound without the consent of the Westminster government" David Martin MEP
The dramatic turnaround marks the first time that yes campaigners has been ahead, and with the new figures showing 51 per cent for independence and 49 per cent against, pollsters are now saying that the result is just too close to accurately call.
Martin warned that Scottish first minister Alex Salmond’s, "‘back of an envelope' policy making illustrates what I have always maintained - if the people of Scotland did vote for independence, Scotland would be outside the EU and it would take long protracted negotiations with the UK government and the EU to get back in - and at what damage to our economy?”.
"As a vice-president of the European parliament and former European commissioner for economic and monetary affairs, Olli Rehn should know what he is talking about.”
Stihler added, "With just days to go until polling day, it is time Alex Salmond came clean with the people of Scotland.
"At Westminster, the UKIP tune grows ever more shrill, forcing the Conservative-led government to lurch towards its threatened in-out referendum on EU membership" -Scottish first minister Alex Salmond
However, writing in the latest issue of the Parliament Magazine, Salmond said it was clear that the only guarantee of an EU future for Scotland was as an independent country. "At Westminster, the UKIP tune grows ever more shrill, forcing the Conservative-led government to lurch towards its threatened in-out referendum on EU membership," he said.
"UK prime minister David Cameron is now a prisoner of events which he no longer controls - and the odds on the UK exiting the EU are narrowing all the time. A vote for independence, in contrast, will give Scotland the opportunity to chart our own future as a constructive partner in the European family," argued Salmond.