Nicola Sturgeon has failed to spell out what currency an independent Scotland would use
In a damning indictment of the leadership, Kenneth MacAskill said the party urgently needed to set out its position “before criticism turns to scorn”.
The former Justice Secretary also admitted the SNP was at its “weakest on domestic issues”, with a policy agenda that was “limited to say the least”.
Since struggling over the currency in the first referendum, the First Minister set up a Growth Commission to analyse the problem, as part of a wider economic review.
It is months away from publishing its findings – but at the SNP spring conference in Aberdeen at the weekend, Treasury spokesman Stewart Hosie suggested the party would not look for a currency union with the UK and said the pound was “not as strong an option” as before.
Former First Minister Alex Salmond has also said the party was open to abandoning his plan for a currency union after it was flatly rejected by Westminster during the 2014 campaign.
Speaking on Sunday Ms Sturgeon said that if Scots backed the break up of Britain the pound would be the "starting point" – but stressed a decision is yet to be made.
Kenneth MacAskill said the SNP urgently needed to set out its position
Writing in the Herald newspaper Mr MacAskill claimed Theresa May's decision to block another poll had helped the the SNP by keeping the spotlight on the constitution.
Failure to address the currency issue is becoming not just lamentable but laughable
But he warned it continued to face problems arguing "health, education and the economy will return to the fore".
He said: "The SNP is at its strongest on the constitution and weakest on the domestic issues.
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"Moreover, the fundamental issues that lost the first referendum and undermine the case for a second – the currency and the economy – remain.
He admitted the party was at its ‘weakest on domestic issues’
"Failure to address the currency issue is becoming not just lamentable but laughable. Action needs to be taken before criticism turns to scorn."
Earlier this month, Mr MacAskill criticised the First Minister's record in running education, health and other key areas.
He also launched a scathing attack on Miss Sturgeon's dominance of the SNP, pointing out that the party "has to be bigger than any individual member".
Opponents seized on his latest remarks insisting Ms Sturgeon was in chaos over the currency issue.
Scottish Tory economy spokesman Dean Lockhart said: “This is a cutting intervention from someone who, not that long ago, was at the heart of the SNP’s separation campaign.
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More than 3.6m people turned out to vote in the Scottish independent referendum, resulting in a 'No' vote with 55.3%.Here we take a look at the public's reaction.
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Pro-Independence supporters are pictured in Edinburgh, Scotland, on September 19, 2014, as referendum results are announced. Scotland appeared set to reject independence on Friday with 23 out of 32 voting areas declared and the crucial Glasgow region having given its result
"If even Kenny MacAskill feels the nationalists’ currency plans are laughable, you can imagine what the voters think.
"With so much SNP confusion over a fundamental issue, how can voters be asked to make an informed decision in an independence referendum?”
Scottish Labour MSP Iain Gray added: “Despite causing a decade of division, the nationalists still cannot answer the fundamental questions of what currency a separate Scotland would use.
“Kenny MacAskill is absolutely right that the SNP’s performance is lamentable – and it is weakest when it comes to domestic policies.
“The SNP should stop trying to drag Scotland back to the arguments of the past and get on with fixing the mess it has made of our public services.”
Alex Salmond has said the SNP was open to abandoning his plan for a currency union
An SNP spokesman said: "The First Minister has been clear: Scotland’s choice must be informed. We will be frank about not just the implications of Brexit, but the opportunities and challenges of independence too.
"On currency, the starting point for our consideration is that Scotland would use the pound. It’s our currency too.
"Our Growth Commission of economic experts is currently working on a plan for Scotland's economic future. It will finish its work over the next few months and will then inform economic policy going forward."