A blueprint for a federal United Kingdom offers Scotland "the best of two worlds", according to the senior politician behind the plans.
Sir Menzies Campbell, the former Liberal Democrat leader, argued that the current set-up is unsustainable and said the proposals offer answers to the "anxiety" some people may have about independence.
The MP for North East Fife chaired a commission which drew up the "route map" towards home rule, unveiled by the Scottish Liberal Democrats.
It proposes that the historic Act of Union between Scotland and England should be scrapped and replaced by a declaration of federal union. Scotland would also raise about two-thirds of the money it spends under the plans.
Defence, foreign affairs and welfare would remain with a federal UK Government at Westminster.
Speaking on BBC Radio Scotland, Sir Menzies said the current arrangements are no longer sustainable.
He told the Good Morning Scotland programme: "This is an effort to put flesh on the bones of the traditional Liberal policy that was previously of home rule, to take account of the political, social and economic changes which have taken place in recent years and to provide not so much a blueprint but a route map towards federalism. That is in the interests not just of the people of Scotland but it's in the interests of the people of the United Kingdom as well."
He went on: "It's an effort to give the islands and nations of the UK a sustainable constitutional settlement for the future. I don't believe the present settlement is sustainable (with) greater powers in Wales, greater powers in Northern Ireland and England beginning, rather slowly but eventually, to take the view that some greater control over English affairs is appropriate as well.
"We need a settlement which will deal with all of these aspirations. There's no doubt that the present arrangements are not sustainable. Federalism is the answer to many of the anxieties which people have, in particular the anxiety people have about independence."
The former Lib Dem leader said he believed the question of whether Scotland should be independent or not "needs to be answered once and for all before we embark on alternatives", but he said the proposals represented a substantial contribution to the debate about Scotland's future.