Alistair Darling has admitted that he should have done more to force Gordon Brown from Downing Street, and accused the former prime minister of presiding over a government which had a “permanent air of chaos and crisis”.
The former chancellor said that Labour would have had a chance of “getting through” the financial crisis if Gordon Brown had been more honest about the scale of the problem and agreed to announce more cuts ahead of the election.
Promoting his memoirs he said that he, and other Labour Cabinet ministers, should have done “something” about Mr Brown.
But the Conservatives seized on Mr Darling’s comments that Labour did not have a credible economic policy before the election, pointing out that Ed Miliband and Ed Balls are still backing the “Darling plan.”
Mr Darling’s withering criticism of the former prime minister is contained in his new book which is published this week. He describes how the two men – formerly very close political and personal friends, fell out badly over how to react to the 2008 financial crisis and its aftermath.
And he indicates that Labour would have done better at last year’s election if they had followed a more realistic plan to tackle the record deficit.
He told the BBC: “What it boils down to is, we could have got through this, there was a political way through it - actually we did get some kudos from the way we managed to stop the banking system from collapsing.
“We could have dealt with the recession, but the end point was, we then had to say having done all this, you had to get your borrowing back down without the problem - which frankly I think is the current Government's policy - which seems to be to squeeze the life out of the economy.
“We could have got through this. We didn't - because of the disagreement at the very top.
“The relationship between me and Gordon got progressively more difficult. We had a fundamental disagreement in 2008 as to how bad this was going to be, and then during 2009 we had this whole argument about what you do about the deficit.”
Such was the turmoil and lack of agreement between No10 and the Treasury over Budget measures, Mr Darling describes how he was forced to write parts of the speech “literally until the last minute.”
He added: “If you don't have a credible economic policy, you are simply not at the races, and our problem was it was so blindingly obvious to the outside world that the two of us, Gordon and myself, were at odds, that it really hampered us when it came to the election of 2010.”
Michael Fallon, the Conservative Party deputy chairman, sought to link Mr Darling’s disclosures with Labour’s current economic policy.
He said: “Alistair Darling has now admitted that Labour did not have a credible economic policy last year because they refused to say what spending they would cut.
“Yet Gordon Brown's protege Ed Balls is still in denial by sticking to the same course of more spending and more borrowing. And it's extraordinary that Ed Balls was putting political plotting ahead of the national interest in the middle of an economic crisis.
“This shows why Labour should never trusted with the keys to our economy ever again.”
Mr Darling admits that he held talks with David Miliband, who was considered the front-runner to replace Mr Brown, about forcing the prime minister from office. However, both men decided not to move against Mr Brown.
He admitted that had probably been a mistake and he and fellow Labour ministers should have acted.
Asked if senior politicians should have done more about Brown's leadership, he said: "If you want to criticise us collectively, perhaps we should have done something [about Brown].”
Mr Darling said he was “marked” by the reaction of Mr Brown and his allies after he gave an interview in which he described the crisis as likely to be the worst to hit Britain “for 60 years.”