If the "yes" vote for greater autonomy is successful, Catalonia, in the north-east, would become one of Europe's most independent regions.

The draft plan allows for more independence in areas such as tax expenditure and immigration policies.

Latest opinion polls suggest most Catalans favour the plan, but more than half of all Spaniards reject it.

The proposal is supported by the Spanish government, Catalonia's ruling Socialists and moderate nationalists, but it is opposed by both the conservative Popular Party and leftists who favour outright independence.

Less than a sixth of Spain's population lives in Catalonia but the region accounts for a fifth of the country's economy.

Break-up fears

The referendum is the final step in a process which began in September 2005 when Catalonia's parliament approved a new version of the Statute - the document that organises the relationship and the division of political powers between Spain and Catalonia.

The new version refers to Catalonia as a nation.

Its proposals include giving Catalans more tax revenues and a greater say over how that money is spent, as well as an increase in control over airports and immigration.

The Spanish government has endorsed the plan, but the conservative Popular Party has led the campaign against the move.

Leftists within the region also reject the plan, saying they want outright independence.

The BBC's Andre Vornic says in Spain there is less sympathy for what many see as a selfish power-grab, much too close to de facto independence.

Our correspondent say other concerns are that the Basque country, which suffered from an armed separatist struggle for more than 30 years, may be encouraged to formulate its own demands - which could cause Spain to finally break up.

However, observers say the progress of Catalonia's autonomy plan may have influenced the ceasefire announced by the armed Basque separatists Eta earlier this year.

Polling stations open at 0900 (0700 GMT) and close at 2000 (1800 GMT), with results expected later on Sunday.

(BBC)