Alistair Darling today claims that George Osborne will inevitably have to change course to stimulate Britain's economy.
Writing exclusively in The Independent on Sunday, Mr Darling says the Chancellor is "not daft" and will already have realised that the Government's austerity drive had "choked off" growth. The coalition's rhetoric on the slowdown has already begun to shift to create "wriggle room" to alter its plans, he says.
The remarks come as Mr Osborne faces growing pressure to set out a clear plan for growth at the Tory party conference this week. Andrew Tyrie, the Tory chairman of the Commons Treasury select committee, claimed the Government has "a long way to go to arrive at a coherent strategy" for growth.
A poll of Tory party members for the ConservativeHome website found 42 per cent think spending should be reduced further to cut taxes. Mr Osborne yesterday appeared to rule out tax cuts before 2015. He emphasised the flexibility in his plans, but warned that abandoning his plan would lead to a big rise in interest rates, "the thing that would cripple British families with mortgages, destroy businesses, put people out of work".
With fears of a global recession, the FTSE closed down more than 1 per cent, ending the worst trading quarter in nine years.
Mr Darling, Labour chancellor when Lehman Brothers failed, said countries must "rediscover that spirit of international co-operation" seen in 2008. "We cannot afford to stagnate for a decade or even more," he writes.