Lord Mandelson said it was impossible to predict the depth of the recession
Business Secretary Peter Mandelson has outlined plans to draw up a list of industries that could be saved from collapse during the economic downturn.
He stressed the government was not going to "bail out" every ailing business or "prop up companies that are not viable".
But Lord Mandelson said ministers would be trying to identify key businesses and industries that had a future.
He has also said the recession's severity may be under estimated .
Speaking at a conference by think-tank Progress, he said there were "preliminary conversations" about what action could be taken to help competitive firms get through the recession and "provide a platform for economic growth in future decades".
In an interview with the Guardian newspaper, the business secretary said it was impossible to predict how deep or painful the recession would be.
The government has predicted a recovery by 2010. In his pre-Budget report, the chancellor forecast that a big rise in government spending would help to minimise the downturn.
Alistair Darling expects economic growth of between 1.5% and 2% in 2010.
In his Commons statement earlier this week, the chancellor slashed economic growth forecasts for next year from 2.75% to between minus 0.75% and minus 1.25% - the biggest downward revision on record.
He hopes that a raft of measures worth £20bn will save the UK from a downturn similar to that seen in the early 1980s and 1990s.
But Lord Mandelson has conceded that it was difficult to tell whether the economy would grow by the rates forecast.
"No-one can foretell how short or long, how painful or painless, the recession is going to be," he said.
"All I know is that the deeper we get into the recession, the higher the costs of climbing out will be."
'Tax out of need'
In the interview, he also dismissed criticism that introducing a higher tax for top earners signalled the death of New Labour, arguing that it was borne out of economic necessity.
Government plans to raise income tax on earnings over £150,000 a year to 45p in the pound after the next election in 2011 has created a political row.
But Lord Mandelson - widely seen as one of the architects of New Labour - insisted that the measure was purely a "practical measure" to help the government repay borrowing.
"There would have been a backlash if those who are so clearly better off and have gained so much in the last 10 years were not seen to be shouldering their fair share of the burden," he added.
Earlier this week, he said in a speech to directors that the New Labour principle of rewarding hard work and entrepreneurial risk still stood.
"We will only tax out of need, not out of envy or spite," he said.
Woolworths and furniture retailer MFI both went into administration last week - the most high profile victims so far of the financial and economic crisis.