Nicola Sturgeon has said the pro-independence side was taken "by surprise" when David Cameron agreed to the independence referendum and thought it had a "pretty low" chance of winning at the start of the campaign.

The former First Minister made the comments as she was reflecting on the vote during a discussion on the Political Currency Podcast hosted by former Conservative Chancellor George Osborne and former Labour Cabinet minister and shadow Chancellor Ed Balls.

She also noted that "we thought that if we got the campaign right we could give ourselves a fighting chance."

Talking about the political context in which the demand for the referendum was made to the UK government by her predecessor Alex Salmond, which followed the SNP winning a majority in Holyrood in 2011, she said: "Alex was a gambler... he never made any secret of that. So he was always weighing the odds. He was always trying to game in his own mind what gave us the best possibility of coming out of this process with something that was a victory. "

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Pressed on whether she thought the independence side would win, she replied: "[We thought] we've got to fashion a way of becoming the winners. So at that point, what did we think about our prospects of success? We thought, if you looked at them rationally, they were pretty low, pretty slim. 

"But I think in our hearts, we thought that if we got the campaign right we could give ourselves a fighting chance."

During the discussion Mr Osborne said he did not have to persuade the then Prime Minister David Cameron to agree to the referendum which took place on September 18, 2014 two years after the UK and Scottish Governments signed the Edinburgh Agreement believing they would be calling the Yes's side "bluff". The Pro-Union side won by 55% to 45%.

"I was very keen on it. I thought, basically my view was, ‘Call the nationalist’s bluff’. And let's kind of catch them off guard. I mean, that was, that was very much my view," he said.

Asked by Mr Balls if he had to persuade David Cameron, he replied: "I don't remember ever kind of really having to persuade him, because I think he was thinking along these lines, it was just obviously a huge decision to take, because the consequences of losing would be the break up of the United Kingdom. You know, he would go down as kind of Lord North who lost America, but worse, you know, he’d lost Scotland." 

Ms Sturgeon added:  "I don't think we did expect Cameron to lay down the gauntlet as he did, when he did it, which I think was January 2012 so that probably took us a little bit by surprise in that moment."

Mr Osborne said he regarded the SNP's plan  for a currency union with the UK post independence as its  "its biggest single mistake" in the "entire referendum campaign".
Ms Sturgeon said the currency issue was "the single most difficult issue" for the Yes's side campaign.

"It's tempting just to say yes, but I think it is more complicated than that. We certainly handed you a veto which you used, and we can come on to how that played in the campaign. I don't think it played entirely as you thought it might, but still it wasn't brilliant for the Yes campaign," she said.

"I suppose the reason it's more complicated is that currency was the single most difficult issue for us in that campaign, and the reality is, whichever of the currency options we had gone for, and effectively, there were three, the currency union, using the pound without a currency union, or a new Scottish currency.

"That would always have been the difficult, the big, thorny, difficult issue at the heart of the campaign, because we could never have proven how that would have played out." 

The former First Minister said she found the defeat for the Yes side "utterly heartbreaking" and thought the result would have been different had a poll not come out in the Sunday Times just ahead of the vote showing the Yes side in the lead.

"We got the news on the Saturday afternoon, and so there was a sense of jubilation [...] it was quickly followed by a sense of the might of the British establishment raining down in our heads was just suddenly going to get even more ferocious," she said.

"And could we withstand that in the final couple of weeks? And I think we thought then, and I still think. Now, if that poll had come a week later, it may have changed the outcome of that referendum." 

She added: "When the realisation hit that we hadn't done it, it was utterly heartbreaking. You know, I think one of the things that independence supporters often say about those of you on the other side is that you don't really understand that we really mean this. 

"We really do want Scotland to be independent, and we think it is the right thing and and for people like me, Alex, John Swinney, we're people that had spent our entire lives campaigning for this moment so having come so close and then fallen short, it was heartbreaking. I headed to the count in Glasgow and did some of the most emotionally raw live interviews I have ever done, my heart was, was breaking, actually."