Britain is facing the 'most serious global recession for over 100 years', Ed Balls, Gordon Brown’s closest ally, has warned in an admission that the financial crisis could be worse than the Great Depression of the 1930s.

The Conservatives seized on what they said was Balls’ 'staggering and very worrying admission' of the scale of the global downturn.

Last week, the prime minister talked about the need for global action to 'take the world out of depression', but his spokesman said his use of the 'D word' was 'a slip of the tongue'.

But Balls, children’s secretary and formerly Brown’s chief economic adviser at the Treasury, has suggested that the gloom is spreading.

Financial Times