Britain may need to be bailed out by the IMF if the General Election results in a hung Parliament, Ken Clarke and George Osborne have warned.
Speaking at a press conference in Westminster, shadow business secretary, Mr Clarke, said that an inconclusive result would be followed by horse-trading and negotiations.
His comments came with the Lib Dems still riding high in the polls in the wake of Nick Clegg's much-praised performance in last week's first prime ministerial debate.
"If the British don't decide to put in a government with a working majority, and the markets think that we can't tackle our debt and deficit problems, then the IMF will have to do it for us" said Mr Clarke.
Referring to the Lib-Lab pact of 1977, he added: "It was a farce, it was a fiasco, it didn't save us from disaster. And I would be very, very alarmed if any prospect of that occurred on this occasion."
When asked whether he agreed with Mr Clarke's comments, Mr Osborne said: "It is a statement of fact that the last time - indeed the only time - the IMF came in was when the governing party did not have a workable majority in Parliament, which was in the late 1970s.
