Ed Balls has stood by his claim that the global recession is the "most serious in 100 years".
The children's secretary, who for many years was one of Gordon Brown's closest advisers, said the current crisis may be "more extreme" than the 1930s.
He denied this was the gloomiest forecast yet by a senior minister, as Mr Brown had also called the global nature of the crisis "unprecedented".
The Tories say his "worrying admission" contradicts Treasury forecasts.
But Mr Balls told the BBC he had been drawing attention to the unique extent and speed of the global financial crisis, describing it as a "once in a lifetime" sequence of events.
The comments were no different from those made by Gordon Brown and by leading economists in recent months, he claimed.
"It was the same as is being said by the prime minister, the chancellor, the chief secretary. It was very similar to what was said by President Obama yesterday, and by the Bank of England.
government ministers are oscillating between complacent optimism and this doom-laden picture of Armageddon
Vince Cable, Treasury spokesman
"This are unprecedented times in global financial markets - the worst we've seen I think for probably more than a hundred years, this global financial recession. The question is how do we respond. Do we stand aside, or do we act?"
He also insisted he was not saying that the UK economy could be in recession for 15 years but how the country dealt with its current challenges could shape political debate for a generation.
In a speech to Labour activists in Yorkshire at the weekend, Mr Balls said the current economic situation was "more extreme and more serious than that of the 1930s".
He said the current difficulties would change the political landscape for possibly the next 15 years.
He added: "The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years as it will turn out."
Shadow Chancellor George Osborne said the remarks, reported in the Yorkshire Post, contradicted Treasury forecasts that the economy will be back on track by the second half of this year.
"This is a very worrying admission from a Cabinet minister," he said.
"We are being told not only that we are facing the worst recession in 100 years, but that it will last for over a decade, far longer than Treasury forecasts predict."
Lib Dem Treasury spokesman Vince Cable contrasted Mr Balls' dire assessment with fellow minister Baroness Vadera's recent claim she could see "green shoots" of economic recovery.
Mr Cable said: "Instead of giving clear and consistent leadership, government ministers are oscillating between complacent optimism and this doom-laden picture of Armageddon. Surely the truth lies between the two?"
Downing Street rejected the suggestion that Mr Balls was sending out a more negative message than other ministers.
"Ed Balls was making two points," said the prime minister's official spokesman.
"One is the unprecedented global nature of this crisis - the fact that it is affecting virtually every country in the world, which is different from what we have seen in previous downturns and recessions of this nature - and also the speed with which it has affected pretty much every country in the world.
"And also, the fact that it is very heavily focused on the financial sector.
"Those are the two points Ed Balls was making. He wasn't saying anything beyond that."
Mr Balls attended a Cabinet meeting on Tuesday at which the state of the economy was top of the agenda.
The schools secretary was backed by the influential Labour backbencher John McFall, chairman of the Commons Treasury Committee.
Mr McFall told BBC Radio 4's TheWorld at One: "Actually I agree that this situation is really, really severe.
"Like the 1930s, we have a banking crisis here. We have a banking crisis, a liquidity crisis, a credit crisis.
"If we don't give the unvarnished truth on this matter, we are going to kid people on. It is very important we tell them that this is tough, it is going to be rough over the next few months, but we have got to work it out."
Last week, Mr Brown used the word "depression" during prime minister's questions, but his spokesman later said this had been a slip of the tongue.
The Conservatives urged him to clarify his comments and be careful with language.
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