If Alistair Darling really doesn't think we're heading for a catastrophic recession why did he give an interview warning of impending economic disaster? Westminster Editor James Cusick reports

The chancellor, Alistair Darling, spent yesterday in television studios trying desperately to dampen the controversy stirred by an interview in the Guardian in which he warned that economic conditions were "arguably the worse they have been in 60 years".

Despite the headlines created yesterday by the chancellor, which followed an interview in which he also said the economic problems would be "more profound and long-lasting than people thought", his Treasury special adviser insisted that Darling remains convinced Britain will escape recession.

The Treasury adviser said that "no mention" had been made of recession during the long Guardian interview and it was "global economic conditions" that the chancellor was talking about, not the British economy specifically.

The confusion forced Darling to clarify the message given to the Guardian during an interview conducted at his home in Bernera on Lewis on August 18 and 19.

Most observers assumed Darling was offering a new and grave assessment of the British economy and the coming downturn in Britain's economic fortunes. This led the shadow chancellor, George Osborne, to state that Darling had "let the cat out of the bag" over the true state of the UK economy.

The Treasury, however, emphasised that the chancellor had been explaining the "unique" problems faced by the "global economy".

The irony of Darling's attempt to re-explain his own comments will not be lost on those who read in the lengthy newspaper interview that he believed: "Politics is the art of communication. If you can't communicate, then it doesn't matter if you're truly brilliant as a technocrat."

Darling also told the Guardian that Gordon Brown's year-old administration had "patently" not been able to "get across what we are for and what we are about".

Last night the Liberal Democrats' Treasury spokesman, Vince Cable, said: "I, like everyone else, assumed Alistair Darling was specially talking about the British economy facing the worst conditions it has in over 60 years. Now it turns out this is another wonderful example of the inconsistency and the failed communication that the chancellor actually points out himself."

The interview, meant to be a highly personal profile of Darling, was to be published the week before Labour's crucial conference in Manchester in September.

Along with the Guardian, the local Stornoway Gazette was also given an interview. The Gazette's brief focus on the British economy was, however, far more sanguine.

Talking to the Lewis newspaper the day after the lengthy Guardian interview was concluded, Darling said he was "cautiously optimistic for the future", contradicting the apparent pessimism of the worst conditions for "60 years" and the forecast that the economic climate would worsen and be more profound and long-lasting than people feared.

Darling told the Gazette Britain would not face a recession in the coming months and added that he believed the economy would continue to grow. He said: "I think the economy will keep on growing. We have the fastest growing economy of the developed world. I don't agree that there is going to be a recession, but the next 12 months is going to be difficult."

How Labour will emerge from its conference is likely to determine whether Brown can survive as leader till the next general election, probably in 2010.

However, publication of the Darling interview was brought forward to yesterday, the week before a rumoured Cabinet reshuffle.

Those close to Darling denied that there had been any political "choreography" in the timing of the profile and insisted it had nothing to do with rumours that Darling could be removed from the Treasury, although in the Guardian interview he said: "There's lots of people who'd like to do my job, and no doubt, actively trying to do it."

However, by issuing a strong warning about what lay ahead for British economic fortunes and then having to re-explain that he was really talking about "global" conditions, he may have done little to boost his credentials as a communicator.

In television interviews yesterday he stressed that the "fundamentals" of the UK economy remained strong. Figures recently released showed zero growth for the second quarter of this year. Fears that an accelerated deterioration is not far off have been reinforced by statistics from housing and building firms which have laid off thousands of workers and warned of a huge profits slide.

Yesterday the shadow chancellor said that two stories were being offered and both of them couldn't be true. George Osborne said: "Who is telling the truth at the top of the government? The prime minister says the economic situation isn't as bad as people think, but the chancellor said we are at a 60-year low. Now it still remains unclear about whether Alistair Darling really meant to tell us the truth about the mess 10 years of a Labour government has left us in."

In what some government critics will see as a damage limitation exercise ordered by an angry Number 10, Darling yesterday told BBC Scotland: "What is unprecedented in recent times is the coming together of the unique set of circumstances where you have a profound credit crunch that's affecting every country in the world and the very high oil and rising food prices."

He also insisted that the difference between previous governments and Gordon Brown's "is that we are taking action to help people, whether it's rescuing Northern Rock, helping people to get back to work, or tax rebates which are due at the end of next month."

He said help would be offered to those hit by the crisis. On Tuesday the Treasury will unveil a package of reforms aimed at rejuvenating the slump in the housing market. With three weeks left till the party gathers in Manchester, another round of mismanaged explanations will do little to lift spirits. A former minister said: "Alistair has said people are pissed off with Labour's handling of the economy. Well they'll be pissed off even more if we keep offering confusing information about how hard it is out there. The Bank of England told us last week that things could get worse and that two million people could be unemployed by Christmas. So we don't need excuses about it being a world problem. We need solutions, and hopefully they'll start to arrive this week."