We were never trying to urge people to pay their credit card bills tomorrow, Downing Street says

David Cameron has hastily rewritten his conference speech to remove any suggestion that he is either urging or instructing the public to pay off their credit card bills – a move that could dampen consumer demand and worsen the recession.

A pre-briefed version of the speech on Tuesday read: "The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills."

The prime minister's aides said the speech would now read: "That is why households are paying down the credit card and store card bills."

A Downing Street aide said: "We are putting our hands up on this. It has been misinterpreted, and the only way to deal with it is to change the wording. We are not going to carry on when it is fairly obvious that it needed to be clarified.

"People at home who are struggling cannot afford to pay off their debts, so to have an instruction from on high to do so would have been wrong. We were not ever trying to urge people to pay their credit card bills tomorrow. It was intended as a metaphor or an observation, as opposed to an instruction."

The Conservatives pointed to figures showing the public were paying off their debt saying: "Consumers are paying off credit cards. In January 2010 consumers owed £62.4bn on credit cards. In August 2011 was £57bn."

Downing Street also denied that Treasury forecasts showed household debt was set to rise, saying these figures included mortgages.

A number of newspapers had written up the speech as a haughty instruction from Cameron to the public to pay off their debts for the sake of the economy.

On Wednesday morning, economists suggested the plan for a collective pay-off of credit card debts, if interpreted literally, would be economically disastrous as well as politically inept.

The episode shows the delicate balancing act Cameron faces in trying to offer some optimism in the middle of the deepening recession.

The prime minister does not want the entire Tory message to be one of gloom, deficits and debt, but fears he will be regarded as out of touch if he strays from those areas of concern.

Downing Street said the balance of the speech, including its emphasis on leadership through a crisis, was not being changed.

Officials said Cameron would not be adding any direct reference to the latest downgrade of UK growth figures or further bad news from some of the UK retailers.

But the shadow chancellor, Ed Balls, said: "As today's figures show, families struggling with higher food and energy prices, rising unemployment and the VAT rise are already struggling to get by and are cutting back.

"They don't need an out-of-touch prime minister lecturing them about paying off their credit cards.

"These deeply concerning figures show the British economy has stagnated since the autumn of last year, well before the eurozone crisis. They should set alarm bells ringing in Downing Street and the Treasury."

He said it was "deeply out of touch for ministers to claim Britain is a safe haven when our recovery was choked off last autumn" and said the prime minister needs to come up with a plan for jobs and growth "and he needs to do it fast".

"David Cameron and George Osborne urgently need to realise that spending cuts and tax rises which go too far and too fast have hit consumer confidence," he said.

The deputy Conservative chairman, Michael Fallon, said Cameron was going to clarify his remarks. "As households have paid off the debt, so the government has got to do the same," he added.

David Willetts, the universities minister, said: "It was taken as personal financial advice when what he [Cameron] was trying to describe was what was going on in households. Drafts circulate, drafts get altered – what matters is what the prime minister says this afternoon."

The Institute for Public Policy Research director, Nick Pearce, said that if all households paid off their credit card debts, consumer spending in one quarter would be reduced by 25% and GDP by 15%.