SCOTCH whisky producers will need a "dram diploma" to sell the nation's best loved tipple under plans to protect the industry.

The novel idea has been unveiled as part of a drive to ensure Scotch has the same protection as Champagne and Parma Ham.

However, the Scotch Whisky Association has expressed reservations, saying there are still "issues to be resolved" over the Coalition's proposals.

The plans follow fears that producers in countries like India and China are attempting to brand their own whiskies to make them look like Scotch.

Danny Alexander, the LibDem Chief Secretary to the Treasury, said the issue was not just of a national drink but "a £4 billion international export success story that is hugely important to the whole of the UK".

He said it was right the Coalition wanted to go the "extra mile" to protect the industry.

He said: "These 'dram diplomas' will help keep Scotch Scottish. I hope Scotland's world-renowned whisky producers raise their glasses to this extra protection the UK Government is rightly providing."

Under the plans, inspectors will visit more than 100 Scotch whisky distilleries over the next two years. A complete record of approved producers is expected to be published by 2015.

The new proposals are designed to protect Scotch whisky, by ensuring it goes through a specified production process.

Under the plans, all Scotch whisky distilleries must be in Scotland, and must also be involved in at least the fermentation and distillation processes. Companies who are involved in the maturation process must also be in Scotland, the Coalition insists.

However, blending, bottling and labelling may take place anywhere in the world, it says.

The Scotch whisky industry has sales of around £7bn a year.

As well as being a major employer in Scotland it also contributes more than £1bn to the Exchequer.

A spokesman for the Scotch Whisky Association said "We will take part in this consultation. There are a number of issues to be resolved."

Scotch Whisky is already defined in UK law and is a designated product of "geographical indication", alongside Champagne, at European Union and World Trade Organisation level.

In a number of key markets, such as China, it has also been granted "geographical indication" protection.

However, the Coalition insists that further protection is necessary to ensure the name of Scotch whisky is not exploited around the world.

The diploma would carry the same weight as that given to protect iconic foodstuffs such as Parma ham and Champagne which are registered under the Europe-wide list of Protected Food Names (PFN), meaning copycat produce cannot be sold.

The Arbroath Smokie, Stornoway Black Pudding, Scotch Beef and Shetland Lamb are among Scottish products which currently enjoy PFN status,

There are more than 800 PFNs registered across the European Union, 90% of them in France, Italy, Spain, Portugal, Greece and Germany.

The UK has 39 so far, including the Melton Mowbray Pork Pie, Cornish Clotted Cream, Stilton Cheese and the Whitstable Oyster. Highvalue products such as Scotch Beef – the top-selling Scottish brand in the UK – and Scottish Farmed Salmon have annual sales of around £700 million.