'Maverick' challenges Cable's wisdom

"One thing I never stopped sounding off about was economic policy," he says, recalling his "maverick" days on the backbenches before returning to the frontline as Shadow Business Secretary.

"I'm able to look up my Budget speeches to find that just as much as (Liberal Democrat Treasury spokesman) Vince Cable I was going on about problems of mounting debt, deficits and irresponsibility with which the public finances were being run."

Mr Cable has made great play since the credit crunch began of how he sounded warnings before the crisis struck, most recently in the televised debate between the three contenders to be Chancellor.

Mr Clarke admits he never predicted just how badly things would go with the banking and economic crisis but condemns the absence of effective regulation, something Gordon Brown admitted was a regret this week.

"I never foresaw it would all go off a cliff, but 'it was

unsustainable' was my boring phrase I used to use."

Pointing out that the Governor of the Bank of England had been stripped of regulatory powers under New Labour, he says: "If the Governor of the Bank of England had allowed this to happen, he would have been taken out and shot in the old days."

Mr Clarke, who was Mr Brown's predecessor as Chancellor in 1997, accuses the Prime Minister of being "the most irresponsible and incompetent chancellor we've had since the War".