Tories condemn 'weak' Government

The Tories attacked the Government's "weak and dysfunctional" leadership as the Organisation for Economic Co-operation and Development (OECD) predicted the country's economy would shrink by 0.3% in the third quarter and a further 0.4% in the fourth.

That meets the generally accepted definition of a recession as two successive quarters of negative growth.

The gloomy assessment contrasted with Chancellor Alistair Darling's optimism that the economy's "fundamentals" would steer the country through the international challenges of the credit crunch and high oil prices.

Mr Darling said at the weekend the economic times faced by Britain and the rest of the world were "arguably the worst they've been in 60 years".

But asked about the OECD forecast, he said he remained "optimistic" about Britain's economic prospects.

"We have these twin shocks, along with every other country in the world," he told BBC Radio 4's World at One.

"But I remain optimistic that we will get through it because I believe the fundamentals - for example we have got high levels of employment, we have got historically low interest rates and historically low inflation compared to the 1980s and early 1990s - will stand us in good stead, provided we support the economy, as we are doing, to get through this tough period. Yes, these are profound shocks, but yes I am optimistic we will get through it."

But shadow chancellor George Osborne said: "This is more gloomy news, coming on the back of the Chancellor's warning that the economy is facing the worst crisis in sixty years.

"The depressing thing is that at the very moment when Britain needs a strong and united leadership, we have a weak and dysfunctional government. Gordon Brown is more focused on his own short-term survival than on the long-term recovery of the economy that he has led to the brink of recession."