CHANCELLOR Alistair Darling today set out plans for a massive £20bn shot in the arm for the ailing economy as it heads for recession.

The Chancellor told the Commons that the UK would be in recession by the end of the year - with output contracting over the course of 2009.

But he insisted that as a result of the measures he was taking that there would be a healthy recovery in 2010.

He said that the Pre-Budget Report set out a "comprehensive plan" to deal with the effects of what was an "unprecedented global crisis".

He said that the measures he was taking would mean that the downturn would be "shorter and shallower" than would have been the case.

But the Chancellor said that public borrowing was going to rocket to £78 bn this year and £118 bn the following year.

Mr Darling said overall growth this year would be just 0.75% - with a second successive quarter of negative growth in the final three months, the technical definition of a recession.

Next year, he predicted the economy would shrink by between 0.75% and 1.25%, but would then bounce back in 2010 with positive growth of 1.5% to 2%.

The Chancellor’s insistence that the UK economy faces global challenges "from a position of relative strength compared to the past" brought cries of derision from opposition MPs.

He said it was right to relax rules on public borrowing.

"In the current circumstances, to apply the rules in a rigid manner would be perverse and damaging."

"We would have to take money out of the economy, making a difficult situation worse."