Scottish Nationalism is a fraud, Nicola Sturgeon appears out of her depth and the Scottish Government's campaign for independence is "dead in the water" – according to Nigel Farage, leader of the United Kingdom Independence Party (UKIP).

In an exclusive interview with The Herald, the outspoken MEP says:

* The 2014 European elections will be a watershed for UKIP in Scotland.

* UKIP could emulate the Reform Party of Canada – which went on to form part of the largest party in the Ottawa parliament – and "do something dramatic and remarkable".

* The Coalition is "in a mess" and "terrified" on immigration and its crackdown on migrants exploiting Britain's welfare system is impossible as EU citizens are entitled to benefits.

* David Cameron's promise of an in-out referendum on Britain's EU membership has made "zero impact" on the public but has stopped Tory MPs defecting to UKIP, which would otherwise have happened.

However, Mr Farage's strongest words are reserved for the SNP which, he claims, has been found out on Europe.

He dismisses the assertion, made this week by the Deputy First Minister, that an independent Scotland would only have to amend an agreement with Brussels to become a new EU member state rather than negotiate a full accession treaty.

The UKIP leader declares: "There's nothing Nicola Sturgeon said that has impressed me. Frankly, she appears to be grossly out of her depth in the position she is in. Just for once, I'm going to go with Jose Manuel Barroso [President of the European Commission]."

Mr Farage says Alex Salmond and his colleagues have sold a "completely false argument" – that Scotland could leave the UK and be independent yet become part of the EU.

"This has become clearer to Scottish voters," he claims. "What has sealed it is the EC president making clear that if you left the UK, you have to reapply and sign a treaty that commits you to joining the euro.

"Frankly, the sheer dishonesty, the twists and turns, and the hiding of the report and all the things the SNP have done, they're doing themselves electorally huge damage."

The UKIP leader claims nationalism "has been a fraud committed on the Scottish electorate for the past few decades". He adds: "There is complete intellectual and economic dishonesty in the SNP's arguments, and I have got no time for them."

Mr Farage goes further and insists the SNP's independence campaign is "dead in the water".

He says: "Far too many canny Scots have worked that out. If the SNP is able to reposition itself between now and the referendum, we can have this conversation again. But at the minute they appear to be in a muddle and backtracking on everything – from the currency to the sovereign to the treaty amendment. The irrationality of their position has been exposed."

The UKIP leader accepts his party has made no headway in Scotland – in the 2009 European elections it came sixth behind the Greens with just under 5% of the vote – but argues this is because "the national debate in Scotland has been a different debate and the word independence has meant something entirely false".

He says now this has been "exposed" UKIP can make progress in Scotland on the "far bigger" constitutional issue of the UK's relationship with Brussels.

He points to breakdowns of opinion poll results which show support for UKIP in Scotland as high as 9%.

He describes Scotland as the "missing part of the jigsaw within the UK" but adds: "We are going to do everything we can in the 2014 European elections to get a breakthrough in Scottish politics ... 2014 is the watershed for UKIP Scotland."

An SNP spokesman said: "Mr Farage's outburst is wrong and irrelevant. While UKIP is dictating the terms of the European debate south of the Border – with the Tories threatening to drag us out of the EU and the single market of half-a-billion people – Mr Farage and his colleagues have never moved beyond the far fringes of Scottish politics."

Read the Nigel Farage interview in full