Gordon Brown's authority as British prime minister suffered a further setback when his own chancellor admitted on Saturday that Britain was facing its worst economic crisis in 60 years.

In an interview in Saturday's Guardian newspaper, Alistair Darling admitted that he had been taken by surprise by the credit crunch, warning that the economic downturn would be more "profound and long-lasting" than most people had feared.

He also acknowledged Labour's loss of political power, blaming its declining fortunes on what he claimed was the anger voters felt with Labour's record in handling the economy. Mr Darling said that voters were "pissed off" with Labour.

In a further admission, potentially very damaging to his government, Mr Darling said ministers had failed to get the message across that they understood people's concerns about rising living costs and growing uncertainty in the labour market.

The fall-out from Mr Darling's unprecedentedly frank interview threatens to undermine the prime minister's attempts to recover some political ground after the summer break.

Ministers are expected next week to announce a package of measures aimed at reviving the moribund housing market following Mr Brown's planned attendance at an international summit on Monday to discuss the crisis over Russia's military action in Georgia.

Continued at FT.com