Battered Britain teeters towards a new recession

The latest blow showed the nation's growth slammed into reverse in the last quarter of 2012 - gross domestic product (GDP) contracted by a worse-than-expected 0.3 per cent in the last three months of 2012.

There were sharp falls in manufacturing in particular and the overall figure compared with a false-dawn 0.9 per cent growth in the previous quarter which had been boosted by one-off factors such as the Olympics.

The Office for National Statistics said economic output as a whole remained flat in 2012. Mr Osborne said he would not "run away" from the problems - signalling the economy would continue to be a bombsite.

Economists widely expect GDP to also contract in the first three months of this year, which means the country will be plunged into a triple-dip recession after its longest double-dip for 50 years.

The Chancellor and his cronies are under fire from all sides - the IMF, Bank of England governor Sir Mervyn King and even Deputy Prime Minister Nick Clegg have all indicated "too far, too fast - enough."

Shadow chancellor Ed Balls said: "It is grossly irresponsible and out of touch of George Osborne to once again try to shrug off bad news and refuse to heed the advice now coming to him from right, left and centre."

He said Mr Osborne and Mr Cameron were "asleep at the wheel."

Despite Mr Cameron's increasingly frantic rhetoric, fundamentals within the economy are very shaky - a big rise in employment is built on rocky foundations and inflation is set to rise by the summer.

Mr Osborne warned Cabinet colleagues this week - carrying out their kamikaze policies on a wafer-thin mandate - that more cuts will loom if the Tories get back into power in 2015. Britain's triple-A credit rating is already shaky.

A blizzard of reaction to the GDP figures began immediately. Unite general secretary Len McCluskey called again for the government to change course.

"This is now an urgent question of acting in the national interest. This government has been exposed as failures and fraudsters and is firmly responsible for the continued ruination of our economy."

PCS general secretary Mark Serwotka said: "With a triple-dip recession looming it would be incredible if this government arrogantly ploughed ahead with cuts that even the IMF now says aren't working.

"People are suffering and the poorest in our society are being scapegoated and punished for the failings of out-of-touch government ministers."

Unison's general secretary Dave Prentis said: "The bad news just keeps on coming. The private sector-led recovery, the government crossed its fingers and hoped for, is not happening."

And Ucatt general secretary Steve Murphy warned: "In recent months we have seen a series of long-standing regional construction firms being forced into administration."