Whoever wins election ‘will be out of power for years’

With a week to go before the general election, David Cameron appears to be inching ahead in the race. But is it an election he would be wiser to lose than to win?

The Governor of the Bank of England, Mervyn King, has privately warned that whoever wins could face such a violent backlash against cuts in public spending that they will be thrown out of office and could remain in the wilderness for a generation.

The warning emerged as the three leaders were limbering up to face each other over the economy in the third and final televised debate. The fact that it has come from King - albeit indirectly - will underline the extreme seriousness of the position that the next prime minister will face after the X-factor leadership debates are long forgotten.

It was the American economist David Hale who revealed King's remark, during an Australian TV interview. Asked about the possible contagion to the UK from Greece's sovereign debt crisis, Hale said:  "I saw the Governor of the Bank of England [Mervyn King] last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be."

The Bank of England refused to deny the remark, though it is understood that the last meeting between King and Hale took place in March rather than last week.

What is certainly true is that a regiment of public sector unions are bruising for a Greek-style battle in the streets over public sector job cuts. Some already have strikes pending, including Unite, which has only suspended industrial action against British Airways pending more balloting, and militant Bob Crow's RMT, which has threatened a national rail strike.

Town hall unions are also likely to start agitating for industrial action if they are faced with job losses - which appear inevitable. Lord Mandelson told the BBC this afternoon: "I don't know what Mervyn said but I know I have said, Alastair Darling has said and the Prime Minister has said - that we are going to face a very different financial climate in the next 10 years from the one we have gone through in the last decade.

"We are not going to be able to make the sort of scale of investment right across the range over the next 10 years. But that is different from what the Conservatives are saying - that we have to put everything into reverse and that Britain is broke."

The Hale leak follows the warning by the Institute for Fiscal Studies that none of the three main parties has been honest about the extent of the cuts they will have to make. The IFS found black holes in each of the party manifestos.

King's warning also bears out the feeling of many senior Tories who remember that when John Major won a second term against the odds in 1992 he went on to endure a trial by torture in office, culminating in the run on the pound and Black Wednesday. That blew Tory claims to economic competence sky high and they have been out of office for 13 years as a result.

Now today's Tory leader, David Cameron, is growing increasingly optimistic that he can win a majority, despite the predictions of a hung Parliament. His hopes were given a boost hours before tonight's economic debate when the Economist magazine came down in favour of Cameron not Brown, having supported Tony Blair in 2005.

The endorsement of the Economist is seen by the Cameron camp as an important factor in convincing sceptics during the final week of campaigning that George Osborne, the shadow Chancellor, is up to the task.

So, the Tories were cock-a-hoop at the Economist news. But if Cameron gets his wish, and if King is right, then the British electorate will be handing him a poisoned chalice on May 6. Is he sure he wants to win? ·