I think the only way the Old Firm could do this is lock, stock and barrel. Join the English league system. End of.
Forming a British League: Which Association controls that? Form a new one? Can you still have seperate Scottish and English professional leagues running if it happens? What happens to the respective international sides if Britain is accepted as a distinct football entity?
Take the big team to England and leave a wee team here: Even if that's possible, what happens if both sides qualify for the same European competition? Rangers v Rangers? Could players under contract to one club move between 2 teams in different leagues?
We're all used to that pair ruling the roost up here, but the reality is, historically and currently, UEFA don't give a shit about the Old Firm. Our lot might bend over for them on a regular basis, but why would those who really make the rules smash them to pieces for the sake of 2 nobodies?