Deficit: Clarke fears over hung parliament

The Shadow Business Secretary invited criticism earlier in the week when he first warned about panic in the financial markets if no party wins an outright majority on polling day.

Speaking after the second Prime Ministerial TV debate, Mr Clarke attacked the Liberal Democrat manifesto, saying: "If actually they thought they would be up there in the polls I can't imagine they would have produced the ridiculous document they produced."

He added: "I simply fear an inconclusive election result, a situation where the three politicians who have such genuine disagreements are asked to lead parties into somehow cobbling together an approach to an economic crisis.

"If the British can't form a proper government and people believe we can't manage our debt then the IMF will have to do it for us."