Scottish Secretary Jim Murphy has "humiliated" himself and Labour over inaccurate media reports that a Norwegian minister criticised the Scottish Government, the SNP has claimed.

The row broke out after the Daily Mail reported that Norwegian Foreign Minister had "slapped down" First Minister Alex Salmond over comparisons he often makes between Norway's economic success and Scotland's potential as an independent nation.

In a letter to the Daily Mail today the Norwegian ambassador stressed that his country does not want to be involved in "a domestic political discussion", while adding that the Daily Mail failed to report Foreign Minister Jonas Gahr Støre's approval of the warm relations between Scotland and Norway.

"This is a massive embarrassment to the Labour Party, and a humiliation for Jim Murphy who raised this contrived nonsense in the House of Commons," said Angus Robertson, the SNP leader at Westminster.

"Norway is an outstanding example of an independent country which is husbanding its oil and gas resources for long-term benefit, while Westminster has frittered Scotland's North Sea revenues away. And Norway is forecast to continue to grow, while the UK is projected to tumble into recession.

"With more value to come from the North Sea than has been generated to date, Scotland has every opportunity as an independent nation to deliver similar benefits as Norway has secured. Independence has enabled the Norwegians to make the most of their opportunities, and exactly the same applies to Scotland," he added.

The latest row began when Iceland's economy collapsed and Ireland began to suffer the effects of what many experts believe is an overheated economy too heavily reliant on debt and the construction industry.

As Salmond had referred to these two nations, and Norway, as members of an "arc of prosperity" that Scotland could join if it began independent, political opponents retorted that the nations now represent an "arc of insolvency".

Economists remain divided over whether comparisons between Scotland and Norway – which has a substantial sovereign wealth fund from its oil revenues – are particularly informative in the debate over independence.