A hundred leading economists have made an impassioned call for the government to step back from the brink of a new economic crisis and back a Plan B to save existing jobs and create new ones, amid growing fears of a double-dip recession.

In a letter to the Observer, the umbrella group of distinguished experts from across the country argue that the chancellor must rethink his strategy and enact emergency measures to kickstart growth and save the UK from growing unemployment and a further fall in living standards.

Condemning the intransigence of the chancellor, George Osborne, as he pursues the coalition government's austerity programme, the economists write: "It is now clear that Plan A isn't working. Wave after wave of economic figures… have all concluded the British economy is faltering." And they warn: "Doing nothing is not an option."

They call on the government to consider a host of measures proposed by a body of academics and economists brought together by the left-leaning thinktank Compass. The proposals, in a manifesto entitled "Plan B: a good economy for a good society", will be launched in London on Monday. They include:

■ An immediate halt to cuts, to protect jobs in the public sector.

• A new round of quantitative easing to finance a "Green New Deal" to create thousands of new jobs.

• Benefit increases to put money into the pockets of those on lower and middle incomes and give a boost to spending.

• A financial transaction tax to raise funds from the City to pay for investment in transport, energy and house building.

The call for a new approach comes as the UK economy's sluggish recovery shows signs of stalling altogether amid the fallout from the eurozone crisis. Consumer spending has fallen as wages fail to keep up with inflation, and low to middle-earners have endured the biggest squeeze on living standards for decades.

Ministers are bracing themselves for further bad news this week with the publication by the Office for National Statistics (ONS)of the latest growth statistics. It is anticipated that GDP will have grown by just 0.3% between July and September, representing a modest increase on the 0.1% in the previous quarter.

The letter from the economists, including former European Investment Bank consultant Dr Ha-Joon Chang urges the government to engage with new ideas on stimulating growth, and warns the chancellor that his policies may push the country into further deficit rather than erase the national debt.

It states: The UK jobless total is now at its highest for over 17 years, while growth has all but stalled. Despite the increasing risk of a double-dip recession, which will inevitably result in even greater unemployment and falling living standards, the government refuses to change course. Indeed if the government persists with Plan A the deficit could rise not fall. It's time for a Plan B.We urge the government to adopt emergency and commonsense measures for a Plan B that can quickly save jobs and create new ones. An emergency recovery plan could include reversing cuts to protect jobs in the public sector, directing quantitative easing to a green New Deal to create thousands of new jobs, and increasing benefits to put money into the pockets of those on lower and middle incomes and thus increase aggregate demand. This could in part be paid for by the introduction of a financial transactions tax.Last night, a Treasury spokesman said the next stage of Osborne's plan would be announced next month. "The government has always said that the recovery would be challenging, and the current global uncertainty, in particular in the eurozone, is making it more so," he said. "The government is implementing the plan for growth as planned, including a reduction in business tax, reducing red tape and reform of the planning system." the source added, saying the next stage of the government's plan would be outlined in November when the chancellor delivers his autumn statement to the Commons.