I understand fears over immigration, insists Premier

Senior ministers openly acknowledged the fall-out from his encounter yesterday with 66-year-old Gillian Duffy – who he branded a "bigoted woman" – had been damaging for Labour as they entered the final days of the campaign.

"Yesterday is yesterday. Today I want to talk about the future of the economy," he declared as he addressed workers at a factory in Halesowen in the West Midlands.

But even on the issue he regards as his strong suit there was trouble, with claims that Bank of England Governor Mervyn King had warned privately about the massive scale of the cuts that would be needed after the election.

US economist David Hale told Australian TV that Mr King had confided that "whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be".

There was no comment from the Bank on his reported remarks, although it is understood that the two men met in London in early March rather than last week, as Mr Hale suggested in his interview.

But during his visit Mr Brown could not escape the issue of immigration, with one worker at the Thompson Friction Welding plant demanding to know what he was going to do about it during a question-and-answer session with staff.

Mr Brown insisted he understood the sense of public concern, pointing to the Government's introduction of an Australian-style points system for workers coming from outside the EU.

Afterwards he acknowledged he should not have described Mrs Duffy as "bigoted" after she raised the issue of immigrants coming to Britain from Eastern Europe. However, he did not believe the issue would affect the outcome of the General Election, now just a week away.

Earlier, Home Secretary Alan Johnson admitted: "No one can suggest this wasn't damaging."

He said that Mr Brown was mortified for having made such a "dreadful mistake", and that Labour fully accepted that immigration was a legitimate election issue.