Brown: World is in a depression

Mr Brown stumbled slightly over his words at Commons question time, just a week after admitting that Britain was facing a "deep" recession.

But as the financial gloom deepened, he told Tory leader David Cameron: "We should agree, as a world, on a monetary and fiscal stimulus that will take the world out of depression."

The comment went unremarked on during rowdy question time exchanges between Mr Cameron and Mr Brown, which centred on protectionism and the Prime Minister's use of the phrase "British jobs for British workers".

Only two days ago, Treasury Financial Secretary Stephen Timms suggested in the Commons that the UK could be facing economic conditions as harsh as in the great depression of the 1930s. Mr Timms warned the country was "facing some of the harshest economic conditions for decades, perhaps for a century".

Tory Andrew Tyrie (Chichester) swiftly seized on his comments then, demanding: "If I heard you correctly I think you said that Britain is now facing an economic crisis which is perhaps the worst for a century. Are you suggesting that what we may be facing is worse than the great depression of the 1930s?"

Mr Timms replied: "What I'm suggesting is that the world economy is facing a situation which is certainly the worst in decades ... and some people are saying, for a century."

Shadow chancellor George Osborne swiftly demanded clarification of the Prime Minister's comment.

"The Prime Minister must personally and urgently clarify whether his statement today that the world is in "depression" was a slip of the tongue, or whether he knows something that we don't know," he commented outside the Commons.

"For the sake of confidence he should clear up this confusion. Prime Ministers in particular need to be very careful about their use of language to ensure they don't undermine confidence."