The former Chancellor of the Exchequer made the prediction at the Wimbledon Bookfest.
Alistair Darling believes the recession is far from over and could actually worsen within the next year.
The former Chancellor of the Exchequer made the gloomy prediction in a discussion about his memoirs Back from the Brink with an audience at the Wimbledon Bookfest on Wednesday evening.
The book is an account of Mr Darling’s 1000 days as Chancellor, a post he vacated after the 2010 General Election.
Speaking with Channel Four’s Economics Editor Faisal Islam, who hosted the event, Mr Darling believes the crisis engulfing the euro zone will continue for some time.
“If you had asked me a year ago then I’d have said we would be coming out of it slowly.
“I just see a long period in front of us scraping along the bottom, so the story is most certainly not finished in regards to the crisis,” he said.
The forecast came on the eve of an announcement that seven leading UK-banks have had their debt rating lowered after doubts over Government support in any possible crisis.
The news is a fresh blow for the Government whose austerity measures aim to reduce the national debt and stabilise the economy.
Mr Darling dismissed coalition accusations that the former Labour Government created the current economic problems by overindulging in the fruits of the credit boom.
“Perhaps at times we were not tough enough and were not asking the questions we should have been,” he said.
“But if we are looking at the turn of events in the financial sectors, Britain by comparison has done better than some of our trading partners, who have ran into all kinds of problems,” he added.
He cited the problems of Greece, Ireland and Portugal as examples of a global banking crisis that extends beyond the actions of individual governments.
Although the MP for Edinburgh South doesn’t believe Britain will be leaving the EU, he states changes are needed to avoid the possibility of following the worst affected countries.
“It’s not so much the structure, but more the individual judgements of regulators that need addressing,” he said.
Mr Darling also touched on his heavily publicised disagreements with former Prime Minister Gordon Brown, revealing that plans were made for him to leave the treasury in 2009, but he decided to stay until the election.
“I have a tremendous level of loyalty towards Gordon but even close friends can disagree intensely on certain issues,” said the 57-year-old, adding that he intends to remain a backbench MP for the foreseeable future.