Britain faces the risk of another credit crunch or a Japan-style lost decade of stagnant growth, Business Secretary Vince Cable has warned.
Mr Cable said the world was in "very dangerous terrain" with the euro-zone in crisis and major economies stalling.
The stark comments came at a fringe event at the Liberal Democrat conference in Birmingham.
Earlier, the Cabinet minister had used his keynote speech to insist the Government needed to wage the "economic equivalent of war" on the downturn.
Invoking the example of Winston Churchill's coalition against the Nazis, he said: "You could say: that was war, that's different.
"Yes, it is different. But we now face a crisis that is the economic equivalent of war.
"This is not a time for business as usual, or politics as usual."
Mr Cable went further, raising concerns that the UK could suffer a spell in the economic doldrums like Japan in the 1990s.
The prospect of a second financial crash could not be ruled out, although he stressed that was not a "mainstream probability".
"What could happen? The optimistic view is we get our public finances in order, we do what is beginning to become apparent, which is we rebalance towards manufacturing, exports, investment, green technology ... and (there is) quite a lot of evidence that some of those things are happening."
