Alistair Darling has "no credibility" as chancellor and is now "politically a dead man walking", shadow chancellor George Osborne has told MPs.
David Cameron wants Alistair Darling to go.
He spoke after Tory leader David Cameron said Gordon Brown should move Mr Darling from his role.
But the chancellor accused the Tories of using "cynical opportunism" to cover up a "pretty thin veneer of abuse".
The exchanges came in the Commons as Mr Darling outlined the nationalisation plans for the Northern Rock bank.
Ahead of the Commons clashes Mr Cameron said his party would not be supporting the nationalisation plans.
Instead, the party would be recommending placing Northern Rock in Bank of England-led administration, to get as much money back for the taxpayer as possible.
Hours earlier the prime minister had defended the decision to nationalise Northern Rock.
Mr Brown rejected suggestions he had lost his reputation for economic competence, adding that ministers' actions had stopped the Rock crisis spreading and also protected its customers' cash.
He said UK economic stability had been maintained and nationalisation was now "the best option" for the taxpayer.
Mr Cameron told reporters: "The nationalisation of Northern Rock is a disaster for the British taxpayer, a disaster for this government and a disaster for our country."
Claiming Mr Darling had had "a dreadful six months", he said the chancellor had stolen Conservative ideas to put into his pre-budget report and had overseen a department responsible for losing the details of almost every family in Britain.
Black Wednesday comparison
He said Mr Brown "will have to reconstruct his government".
"He will have to move his chancellor. I don't think this chancellor has any credibility left and that's not good for the country and not good for the economy," he said.
However, he said Mr Darling should be allowed to continue in his job until emergency legislation to nationalise Northern Rock has been pushed through Parliament.
Mr Cameron said he had learnt "a lot" from his experience of being an adviser in the Treasury during the Black Wednesday crisis of 1992, that it was vital for the chancellor to leave the government after such episodes.
He said it was no good the prime minister blaming global financial turbulence for the problems the government is facing.
"It's only in Britain we have had a run on a bank. It's only in Britain we have had to nationalise one of our largest banks," he said.
In a statement to MPs, Mr Darling said he would be introducing emergency legislation to the Commons on Tuesday to take Northern Rock into a temporary period of nationalisation.
Shadow chancellor George Osborne said the plans left the taxpayer bearing "all the risk", which had now doubled to £110bn or a cost of £3,500 for every family in Britain.
"You will never recover your reputation for competence. You are now politically a dead man walking," he told Mr Darling.
"If the prime minister can make a decision he would move you."
Lib Dem support
The chancellor hit back that Mr Osborne was using "cynical opportunism with a pretty thing veneer of abuse".
"The problem the Tories have got is they don't have any coherent idea of what to do."
Later in the Lords, the Conservative former chancellor Lord Lawson said Mr Darling should have acted sooner to nationalise but then close down the bank.
"This has been the biggest saga of incompetence in any bank failure in our history, and there have been a few," he said.
But Lib Dem treasury spokesman Vincent Cable said his party would support the government.
However, he said: "I think in general the government is now going to have to face some very difficult decisions - the bank will have to contract, there will be job losses, we all recognise that - but at least the bank and the North East have some long term hope.
"And I think that for that reason, we shall be supporting these measures in Parliament, with constructive criticism, because this is the right thing to do."
Commons leader Harriet Harman said emergency legislation to nationalise the bank will be rushed through Parliament by Thursday.