Britain could be heading for its worst economic downturn for 60 years and voters are fed up with Labour because ministers have failed to explain its central mission, Alistair Darling has said.

The normally cautious Chancellor has given by far his most explicit warning both of the problems lying ahead and of the reasons behind Labour’s current plight. Mr Darling’s Pre-Budget Report in the autumn is regarded as crucial to any hope of a Labour recovery, and he has been closely involved in a series of economic rescue packages that will be made public over the next three weeks.

He has been arguing for some time that a struggling economy is the true reason why Gordon Brown is finding it hard to lift Labour from its opinion poll lows, and has clearly decided that frankness with the electorate is the best way of explaining the current difficulties. There have been suggestions that Mr Darling might be moved in an imminent reshuffle, but The Times understands that that is unlikely to happen.

In an interview with The Guardian Mr Darling says that the slowdown will be “more profound and long-lasting” than people had expected.

In the Government’s gravest assessment of the economy, which comes after a warning from a Bank of England policymaker that two million people could be unemployed by Christmas, Mr Darling admits that he had no idea how serious the credit crunch would become.

The Chancellor says that Mr Brown and the Cabinet are partly to blame for Labour’s woes because they have patently failed to explain the party’s central mission to the country. The Chancellor says that the economic troubles faced by Britain and the rest of the world “are arguably the worst they’ve been in 60 years”.

He adds: “I think it’s going to be more profound and long-lasting than people thought. We’ve got our work cut out. This coming 12 months will be the most difficult 12 months the Labour Party has had in a generation. We’ve got to rediscover that zeal which won three elections, and that is a huge problem for us at the moment. People are p***ed off with us.

“We really have to make our minds up; are we ready to try and persuade this country to support us for another term? Because the next 12 months are critical. It’s still there to play for.”

Mr Darling appears to go along with yesterday’s report in The Times when he says there will be no leadership challenge, and he confirms recent suggestions that the reshuffle, if it happens, has been delayed.

“You can’t be chopping and changing people that often,” he says. “At some stage before the end of the Parliament he [Brown] will want to do a reshuffle, but I’m not expecting one imminently. I do not think there will be a reshuffle.”

The Chancellor’s remarks about the economy – during a two-day interview at his family croft on the Isle of Lewis – highlight the nerves at the highest levels of the Government after the loss of Labour’s 25th safest seat in the Glasgow East by-election last month. The Tories are comfortably ahead in the polls.

Mr Darling admits that Mr Brown has struggled to connect with voters. Asked whether Mr Brown can communicate Labour’s mission, he says: “Yes, I do think he can. I do think he will.” Asked why Mr Brown has not done so, Mr Darling falters as he says: “Er, well. Well, it’s always difficult, you know. But Gordon, in September, up to party conference, has got the opportunity to do that. And he will do that. It’s absolutely imperative.”

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