The UK could have a “zombie economy” with a jobless recovery from the recession if public spending is cut to tackle the huge deficit, a union leader warned today.

TUC general secretary Brendan Barber said taking the axe to public spending would have a “devastating” impact, increasing the risk of this country suffering a Japanese-style “lost decade”.

Mr Barber said recovery from the recession should be based on the construction of a low carbon economy and a fairer society that requires the super-rich to pay fair levels of tax.

He also called for a high pay commission to be set up to study “unacceptable” rewards for executives as well as bonus schemes.

“In the long term, Britain’s public debt is unsustainable and will have to come down before the gilt markets go on strike. But in the here and now, it is a distraction from the critical economic challenges we face.

“Public spending is the only motor of growth currently available to us. Swingeing cuts would increase the risk of Britain suffering a Japanese-style lost decade, would mean the unwelcome prospect of a jobless recovery, and would lead to the emergence of a so-called Zombie economy.

“Not quite dead – but not exactly alive and kicking either, and the consequences would be devastating.

“Not just the inevitable increase in long-term unemployment, nor just the loss to the private sector of so much government business, but the huge long-term costs – a lost generation of young people, a rise in social disorder and a sapping of confidence within Britain.

“This country would be set back years, if not decades.”

Mr Barber, who will address a TUC conference in London later today on the economy, said Britain had become a low-wage, high-debt society of “turbo-charged inequality”.