The two were sharing a platform at the World Economic Forum in Davos in Switzerland to speak on the theme of "challenges beyond growth".
Mr Clarke in effect accused the financier, who in characteristically vague and apocalyptic terms had spoken of encroaching world disorder, of talking nonsense.
The Chancellor appeared to take some pleasure in telling Mr Soros that he could not understand what was meant by Mr Soros's concept of "the new world order". Mr Soros had maintained that the only way to prevent a period of disintegration in world affairswas for the West to take decisive military action in troublespots such as Bosnia and Chechnya.
"Britain must bear a heavy responsibility for what has happened in Bosnia," Mr Soros snapped in response to Mr Clarke's remarks. A lot could have been done if there had been early intervention, he said.
Mr Soros's raid on the pound was conducted before Mr Clarke became Chancellor but ministers are known still to be smarting at the way Britain's reserve of foreign currency were damaged by the affair.
Mr Clarke questioned the sanity of attempting to impose a military solution and he claimed the history of such action had been "catastrophic".