The Chancellor said his Pre-Budget statement came against a background of "economic uncertainty not seen for generations".

He went on: "I want to take fair and responsible steps to protect and support businesses and people now - while putting the public finances on the right path for the future."

He said: "My central objective is to respond to the consequences of this global recession on our country, both now and in the future, so that we are ready to take full advantage of the recovery of the world economy.

"My aim is to provide support and protection for families and businesses when they need it most. To maintain our commitment to investing in schools, hospitals and the nation’s key infrastructure. And to put in place the measures necessary to ensure sound public finances in the medium term so that as a country we live within our means.

"Not one single initiative, but a comprehensive plan, to support families, business and the economy.

"And because of the wide ranging measures I am announcing today and the many strengths of the British economy, I am confident that the slowdown will be shallower and shorter than would have been the case."

Emphasising the scale of the crisis, Mr Darling cited a Bank of England estimate that global bank losses could eventually reach three trillion dollars - as big as the economies of Italy and Spain put together.

He went on: "So restoring and maintaining financial stability is absolutely crucial."