Brown ally says PM should apologise

A close ally of Gordon Brown has urged the Prime Minister to go further in acknowledging his mistakes in handling the economy.

The chairman of the Treasury Select Committee, John McFall, also acknowledged in an interview with The Independent that his team of MPs could have done more to spot the brewing economic storm, admitting that "we all had a part to play" in failing to see the danger signs.

Mr Brown has admitted "full responsibility" for his role in the economic crisis, but resisted calls to formally apologise. Mr McFall said yesterday that the Government should acknowledge it had made errors, while conceding that an apology from Mr Brown would lead him into a Tory trap. "I think it could be said that we were all caught up in irrational exuberance, and the view that the low interest rate/low inflation environment was here to stay," he said. "The precariousness of the economy was not recognised as it should have been. We all had a part to play in that."

Mr McFall criticised the apologies made by the former bosses of the bailed-out banks RBS and HBOS who appeared before the committee last month. "When you apologise for something, there has to be a sense of genuineness," he said. "That seemed to be lacking. They were sorry for the situation, but they did not admit culpability."

He said he had reflected on whether his committee could have done more. "Maybe, looking at it, should we have asked more about where the risk [in the banking system] was? But if you look at the situation now, banks still don't know where that debt is," he said.

The committee will question Alistair Darling, the Chancellor, tomorrow.