Gordon Brown effectively admitted that the recession may be deeper and last longer than officially forecast today.

The Prime Minister said the success of his economic policies depended on the decisions of other countries amid mounting concerns the downturn will be more severe than first thought.

Worse-than-expected lending and retail figures have cast increasing doubt on the Treasury forecast that Britain will start to recover in the second half of the year.

Asked whether the recession could instead last two years, Mr Brown said: “I think that depends on the level of international co-operation.” He said Barack Obama’s “huge economic programme” would start to make a difference.

The Prime Minister accused the Conservatives of “revelling in things going wrong” and said that it was too soon to say that the £37 billion bank part-nationlisation had failed.

“I do not think you can judge the success of recapitalisation by what happened in one month; you have got to judge it as a necessary means by which, by saving the banks – and saving is the right word – we restore the ability to fund businesses and mortgages.

“If we had not acted that weekend and then the rest of the world acted, you would have had a banking collapse, you would have lost major institutions.”

“From January 1 we have the small business scheme, we have the export credit scheme, we’ve got the ability of companies to defer their payments to the Inland Revenue.

“We’ve got other means by which we will try to get liquidity, cash into the system.”

Mr Brown played down - but did not rule out - the option of a second full-scale injection of public cash. “I do not think that’s the first thing anyone would think about at the moment.

“The first thing we are thinking about is how we can help the flow of money to businesses; how we can get the banks doing what they said they would do after the recapitalisation - that is, maintaining the level of funding for small businesses and mortgages that happened in 2007.”

The Treasury has confirmed that Alistair Darling is considering options for a second bailout, as reported in The Times on Saturday. Among the options are the creation of a so-called “bad bank” to hold the so-called “toxic assets” currently depressing the value of high street banks.

The Prime Minister, who said today that up to 100,000 jobs could be created through Government projects being brought forward, also pointed out that only a small fraction of an £18 billion boost for the economy had yet been spent.

“If we have spent £1 billion of a total of £18 billion to be spent, some on public works, some on keeping people in their jobs, some on environmental and green projects, some on helping more people go to university and college... we have just started.

“You can’t judge a success or a failure by the first few weeks, you’ve got to judge it over the next few months.”

Asked to rule out a 2009 General Election, the PM said it was “the last thing on my mind” - adding, when pressed: “I’ve got no plans for that.”

In a swipe at Conservative rival David Cameron, he said: “Those people who are saying ’don’t use fiscal policy; don’t be active; just let the recession take its course’ - the Conservative view - which I think is wrong because it is, in a sense, almost revelling in things going wrong.

“Things are going to go right because we take the action that’s necessary.”

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