Lord Mandelson stood by his four-letter attack yesterday on an American tycoon who criticised the British economy.

The Business Secretary declared, “Who the f*** is he?”, after Howard Schultz, chairman and chief executive of Starbucks, the coffee chain, spoke of Britain's economy being in a spiral. The incident happened at the British consul-general's residence in New York after the minister had given a speech.

Waiting to do a television interview afterwards, Lord Mandelson was furious when Mr Schultz said on screen: “The concern for us is Western Europe and specifically the UK. The UK is in a spiral.” Lord Mandelson then said, in earshot of guests: “Why should I have that guy running down the country? Who the f*** is he?”

He hinted that Mr Schultz was deflecting attention from the domestic travails of Starbucks. The group went into reverse for the first time last year and in January it announced that it was to close 1,000 outlets.

Lord Mandelson later gave a more carefully worded interview, which a spokeswoman for the Department for Business, Enterprise and Regulatory Reform said “sounded much more like him”. He said: “The UK is not spiralling, although I have noticed that Starbucks is in a great deal of trouble. But that may be because of their overexposure given the state of the market. So please do not project Starbucks on to the UK economy as a whole.”

Friends of Lord Mandelson said he was “standing up for the UK”. An aide added: “He stands strongly by the sentiment of his remarks, but not by the language.”

Times Recommends

• In Margot Fonteyn's footsteps
• Forget beautiful people, let's have wonky Brits
• Fundamentalist brew: faith and power