Boris Johnson yesterday heaped pressure on George Osborne to abandon his austerity programme, saying it was time to ditch the "hair shirt" agenda.
In a direct challenge to the Chancellor's economic strategy, the Mayor of London said Britain was being held back by "talk of austerity".
Speaking shortly after figures revealed the Britain was heading for a triple dip recession Mr Johnson urged Mr Osborne to invest in major infrastructure and housing developments to get the country back on track.
Not enough is being done to boost spending and growth and one of the major problems facing the UK is a lack of confidence due to gloomy economic predictions, he claimed.
Addressing a lunch for business leaders he added: “The hair shirt stuff, the Stafford Crips agenda that is not the way to get Britain motoring again.”
Speaking at the World Economic Forum in Davos, Switzerland, Mr Johnson set out his own seven point plan to get Britain back on track after the economy remained flat through 2012.
The Mayor said: “We need to junk talk of austerity and recognise that the single biggest inhibitor of demand is lack of confidence and that if only some of the people in this room would invest some of the cash in their balance sheets we would see that confidence rewarded in a virtuous circle.”
He added: “I don’t think austerity is a terribly useful concept in this sort of climate. You have to do stuff that is counter-cyclical that is my view. That is why I talk about investment in housing, investment in transport. These are the things that make the big difference.”
Mr Johnson stopped short of a personal attack on Mr Osborne - instead focusing his attentions on the Bank of England.
He said that the UK had “huge potential” but needed to ignore the “mutterings” from the Threadneedle Street which are “not the stuff to give the troops”.
Supporting his fellow Conservative he added: "This morning's news demonstrates why the Chancellor is pursuing measures now that will boost confidence, further stimulate demand and bring growth, through investment in housing, transport and infrastructure.”
Figures for the last three months of 2012 showed the UK economy dipped 0.3% which has led to fears that the country will lose its triple A rating.
Mr Johnson insisted that a concerted programme of house building would drive the economy and give Britain the “growth boost” it needs to hang on to its AAA status.
Mr Osborne has vowed to that he will not “run away” from the problems facing the economy.
Stafford Cripps was chancellor in the late 1940s and used taxes and rationing to try and drag Britain out of the postwar slump.