The Egyptian-born tycoon – who owns Balnagown Castle in Ross-shire – called on his “fellow Scots” to detach their nation from “the English and their terrible politicians”.
In a bizarre interview over the weekend the 80-year-old said that he would be honoured to be the elder statesman of a Scottish republic.
And he even pledged to banish the Royal Family from Scotland and turn Balmoral Castle into a public museum.
In a wide-ranging interview, he said: “You Scots have been living in a coma for too long, it is time for you to waken up and detach yourself from the English and their terrible politicians.
“Whatever help is needed for Scotland to regain its independence, I will provide it.
“When you Scots regain you freedom I’m ready to be your president.
“I have lived in England for 40 years but now the home that I want is in Scotland.”
“Get rid of the Royals”
The businessman – who has been refused a British passport in the past – added that he hoped to be offered a Scottish passport if a referendum on independence goes ahead.
And al-Fayed – who maintains that the British establishment conspired to kill his son Dodi and Princess Diana in 1997 – also said he hoped that a Scottish republic would evict the Royal Family from their Balmoral home.
He said: “If you Scots retain the Royal Family you will have no hope – you will be like Bangladesh.
“But once you get rid of the Royals I will buy Balmoral Castle and open it up – I will run it for the public as a museum.”
But despite his longing for Scottish independence, al-Fayed is angry that the SNP have turned down his offer of financial assistance saying: “I will do anything for Scotland but I don’t want this Alex Salmond.
“I asked to meet him but he refused, I wanted to give him some help and advice but he didn’t want to know.
“I buy property in Scotland, I employ people there, I bring in tourists there, I believe in Scotland but he still won’t see me.”
“Scots are originally Egyptians”
And to show his dedication to Scotland, al-Fayed has also suggested an unusual gift from him to the Scottish people.
He claimed that he felt a close affinity to Scots, because he believes that are descended from an Egyptian princess called Scota.
Mythology dictates that Scota, the daughter of the pharaoh, fled his kingdom with her two sons, and the stone of destiny.
The princess is said to have died after discovering a new land on the north-west edge of Europe, naming it after herself.
Al-Fayed intends to donate a life-size £60,000 bronze of a kilted Scota to be displayed in Glasgow or Edinburgh to celebrate the link between Scotland and Egypt.
He added: “The Scots are originally Egyptians and that’s the truth.
“I will erect a statue to honour the close links between Scotland and Egypt – I will place the statue any place the Scottish people want it, Edinburgh, Glasgow or at Balnagowan.”
A spokesperson for Alex Salmond confirmed that he had declined an invitation from al-Fayed to discuss a possible donation.
They added: “No disrespect was intended.”