The shadow chancellor was accused of breaking convention and putting extra strain on the crucial G20 financial talks by "talking down" the pound.
In an interview with The Times, Mr Osborne delivered a ferocious attack on the Government's economic policy, insisting that increasing state borrowing in a bid to fight off recession brought major risks.
But, speaking at the summit of world leaders in Washington, the Prime Minister said politicians should not make "partisan" points at a time of crisis.
"I now regret the partisan talk from the Opposition," he said.
"I believe that at a time when nations are coming together all over the world to deal with these problems, I think people are looking to politicians to be responsible and to show leadership.
"We are taking the policy that is absolutely essential to take people through these difficult times.
"The Governor of the Bank of England has made it absolutely clear that it is not only right to cut interest rates, but it is perfectly reasonable to have a fiscal stimulus."
Labour accused Mr Osborne - who has been criticised over his response to the global financial crisis and holiday links with Russian oligarch Oleg Deripaska - of a "desperate last ditch throw of the dice to save his career".
"At their conference in October, the Tory leadership said they would support the Government in the difficult decisions we had to take to keep the economy on track," a party spokesman said.
"Just a few weeks later, a panicking George Osborne is trying to talk down the economy in a desperate last throw of the dice to save his career."
However, shadow business secretary Alan Duncan waded in to defend his frontbench colleague, insisting he was "absolutely right" to raise the danger of a run on sterling.
"There is no convention in British politics that Labour has not already violated," Mr Duncan said.
"I'd rather have George Osborne telling the truth than Gordon Brown charging around the world on a journey of deceit.
"Every sensible person knows that Gordon Brown has mortgaged the country and cannot escape the blame."
Tory MP Michael Fallon, a senior member of the Treasury Select Committee, also said Mr Osborne was right to intervene.
"He has been criticised for being too silent, now when he does speak out they are criticising him for that," Mr Fallon told BBC Radio 4's Today programme.
"It is the shadow chancellor's job to warn, and there is a very serious issue with sterling now.
"Imports are becoming more expensive, overseas investment is drying up already and - much more seriously, of course - all this new borrowing the Government wants to do may well not be subscribed to."
Meanwhile, Liberal Democrat Treasury spokesman Vince Cable branded Mr Osborne's comments "baffling".
"Many people will be baffled that George Osborne has apparently failed to notice the fact we've already had a run on the pound, but it's happened gradually rather than in one dramatic moment as with the ERM under the last Tory government," he said.
"Many would believe that having a flexible currency means that there is one less thing to worry about in a time of economic turbulence and growing crisis."
The pound slipped to a 13-year low against a basket of other currencies yesterday.
Its value against the dollar rate fell below 1.48 dollars, while against the euro it reached a record low of 1.17.
The pressure on Mr Osborne was cranked up further today as a significant Tory donor called for him to be replaced as shadow chancellor.
Lord Kalms - a former party treasurer and founder of the Dixons retail empire - said someone more "heavyweight" was needed in the job, and named former shadow home secretary David Davis as his favoured candidate.
"You need someone who relates absolutely to working people who is heavyweight," the peer told the Daily Telegraph. "I think George is a first-class man but I would rather see a bit more grey hair on the front bench.
"David Davis would be absolutely the right man at this time as shadow chancellor.
"I am informing everyone who will listen that change needs to happen."
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