Britain facing 'deepest recession'.
Tessa Jowell, the Olympics Minister, issued the stark forecast as she defended London's bid for the 2012 games.
Her remarks were immediately seized upon by the Tories as a "stunning admission" of the scale of the economic difficulties.
Challenged as to whether the Government should have pursued the bid in the first place, Ms Jowell told BBC2's The Daily Politics: "We were right to go because of the sporting legacy that the Olympics will create.
"But, as it turns out, facing a recession deeper than any we have known, almost certainly, the Olympics is economic gold at a time of economic need."
Shadow chancellor George Osborne said Ms Jowell's comments demolished Alistair Darling's predictions in last month's Pre-Budget Report.