The worst of the recession may be yet to come and world leaders are in danger of hampering the recovery, Gordon Brown will say today.

As he begins a week of meetings with world leaders, the Prime Minister will strike an unexpectedly gloomy note about the prospects of an upturn and will demand that fellow heads of government “sound a second-wake up call for the world economy”.

Soaring oil prices, rising 75 per cent this year, protectionist measures contributing to a 10 per cent drop in trade and the failure of banks to start lending again could all put the recovery at risk, according to Downing Street.

The remarks are a departure from Mr Brown’s usual rhetoric. His forecast that the British economy will emerge from recession by the end of the year is expected to form the basis of Labour’s general election campaign. Downing Street sources denied that the remarks were a change, saying that he had not spoken about the international economy for a while.

Mr Brown will sound the warning when he travels to Evian in France for talks with President Sarkozy today. On Wednesday he is heading off to L’Aquila in Italy for the G8 summit of world leaders, including President Barack Obama.

“If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable world growth, we will be confronted with avoidable unemployment for years to come,” he is expected to say today.

Mr Brown will also say that although public finances need to be sustainable in the long term, “now is not the time for fiscal contraction”. His aides said that he was referring to Britain’s public finances this year and that he was not attempting to start a debate about a second international fiscal stimulus.

But Mr Brown will be keen to protect the legacy of the international fiscal stimulus package he forged at the G20 summit in London three months ago. He faces opposition from the Swedish Presidency of the EU, which is calling for “exit strategies” from stimulus measures during its tenure, which ends in December.

Lord Mandelson, the Business Secretary, told The Times: “We in Europe have to be mindful of the need not to become complacent and not to relax. If we continue to get our reaction to the crisis right we can make Europe stronger.”

Mr Brown’s remarks may be a sign that he will blame other governments for holding back the recovery if the British economy does not improve in time for the election.

The Prime Minister’s downbeat assessment was echoed by Alistair Darling, who confirmed yesterday that the state of the economy was worse than at the time of April’s Budget and warned that public sector pay had to reflect the squeeze affecting the rest of the workforce.

Figures from the Office for National Statistics last week revealed that the economy had slumped at its fastest for 50 years, shrinking by 2.4 per cent rather than the 1.9 per cent believed previously.

The Chancellor acknowledged that public spending faced “much tighter” limits as a result of the recession.

Reports in The Sunday Times suggested that some government departments are expecting to have to cut budgets by up to 20 per cent. Mr Darling did not deny the claim, saying: “It is not attributed to the Treasury.”

He also acknowledged that he had almost been sacked as Chancellor. Asked if Mr Brown wanted to replace him with Ed Balls, who remained Schools Secretary in the last reshuffle, he said: “Some conversations I never ever repeat. In politics you have to be grown-up about it. I am here now and I have a job of work to do.”

Sir John Major, the former Conservative Prime Minister, said that government must “downsize”, suggesting that expanding the State further “is a route that ends in national bankruptcy”.

He said that it should reduce its size by a third, including cutting the numbers of ministers and civil servants. The recession presented Britain with a “philosophical opportunity” to reassess the role of the State.

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