Chancellor Alistair Darling warned today that the UK was "far from through" the recession, raising speculation that he will be forced to ditch his forecast that recovery will begin in the second part of this year.

The Chancellor is today expected to write to all G20 nations urging international action to toughen global regulation of the financial system as part of worldwide co-operation to tackle the economic downturn.

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Mr Darling also indicated that the Bank of England would be required to work "hand in hand" with the Treasury if interest rates approached zero and it wanted to take the further step of "quantitative easing" - or printing money.

In his Pre-Budget Report in November, Mr Darling predicted that output would fall in the UK for the first two quarters of 2009, then start to recover.

In an interview published in the Financial Times (FT) today, he said this projection was "based on the evidence we had at the time".

Noting that the economic outlook remained "difficult", he added: "In the current climate, no responsible finance minister could say that's the job done, far from it. We are far from through this.

"This year is going to be difficult. There are going to be some tough calls."

Mr Darling's comments follow claims from the Conservatives that the Government's recapitalisation of banks and temporary cut in VAT, coupled with the Bank's sharp reductions in interest rates to 2 per cent, have failed to revive the economy.

The Bank's Monetary Policy Committee holds its monthly rate-setting meeting today, and is widely expected to announce a further cut tomorrow to what would be a 300-year low.

With little further room for the Bank to stimulate the economy by reducing rates, Mr Darling said that the Treasury would have to be involved in any decision to take the further step of printing money to buy assets.

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He told the FT that if there was a need for monetary policy action beyond setting interest rates at or near zero "this is something that could only be done with the Treasury and the Bank of England working hand in hand, because the two responsibilities just become so close you have to operate together."

The Chancellor also denounced as "utter madness" Conservative proposals to cut public spending by £5bn over the next financial year to pay for tax breaks for savers and pensioners.

And he suggested that the Tory plan for a national loans guarantee scheme could be self-financing only if it charged prohibitively high fees for insurance.

Britain is the current chairman of the G20 groups of major economies, and will host a key crisis summit in London in April.

Today's letter to G20 leaders is expected to propose wider powers for regulators to ban banks from using business models that cause systemic risk.