The world's largest fund manager Blackrock has warned that a Labour-SNP deal after the General Election could lead to Britain resembling a "pre-crisis Spain."
A partnership between the SNP and Labour would "raise the spectre of a dis-United Kingdom" reminiscent of when Spain's government was beholden to Basque and Catalan separatists and result in a "constitutional crisis".
Blackrock also expects voters in the rest of the UK to strongly oppose any arrangement where SNP MPs can vote on issues that do not affect their constituents but other MPs have no such power in Scotland.
The report, titled Ruling Britannia: UK Election Preview, said:
Imagine a world where the SNP (and other regional parties) obtain more power over spending and borrowing in return for support on key votes. This could turn the UK into a sort of pre-crisis Spain, with mounting piles of regional debt to fund local spending. When fiscal stress hits, markets would look to the sovereign to bail out regional borrowers.
The SNP is expected to make massive gains at Labour's expense and could well end up being the third largest party in the House of Commons. The party would be unlikely to enter a full-blown coalition with Labour if Ed Miliband falls short of a parliamentary majority.
Leader Nicola Sturgeon has said the abolition of Trident and the total ending off austerity are red lines for her party - both of which Labour would be unable to support - although she could extract concessions from Labour for more autonomy in exchange for votes on the Queen's speech and specific policies.
The General Election isn't the only political contest Blackrock has its eye on.
In 2016, Scottish Labour leader Jim Murphy and Sturgeon will go head to head in the Scottish Assembly elections. If the SNP is successful, Blackrock says this would bring the prospect of a second referendum on independence even closer.
But the SNP could handicapped by the dramatic fall in the oil price which has blown apart their post-independence economic plans, the management group added.