Osborne blames euro debts for killing off UK recovery

George Osborne told the eurozone leaders yesterday that the continuing crisis in the British economy is their fault. Hopes of a British economic revival are being "killed off" by events across the Channel, he claimed.

His remarks were ridiculed by his Labour counterpart, Ed Balls, while a prominent Conservative backbencher also rejected the Chancellor's claims.

Writing in yesterday's Sunday Telegraph, Mr Osborne warned that the deal to rescue Spain's banking system would not be sufficient to end the threat to the UK economy. "Our recovery ... is being killed off by the crisis on our doorstep," he said. "That's why a resolution of the eurozone crisis would do more than anything else to give our economy a boost."

Ed Balls retorted: "It's deeply complacent and out of touch for George Osborne to blame Europe for a double-dip recession made in Downing Street." On his blog yesterday, Douglas Carswell, the Tory MP, wrote: "It is not the eurozone crisis that we should blame for our awful economic performance, but the almost total absence of domestic economic reform, coupled with the Treasury's absurd belief that monetary stimulus can engineer growth."

* Voters overwhelmingly believe there should be a referendum on Britain's relationship with the EU, according to a poll by Populus for The Times. It found 82 per cent supported the plan.