A financial group has warned that Britain's national debt level could quadruple if the Government does not act fast and take drastic steps to control the situation.

The circumstances are so dire, that the financial strain could reach debt levels associated with the Second World War, if the Government does not address the pensions and ageing crisis.

The ratings agency calculated that the UK's public sector debt could quadruple from its current level of just 50 per cent of the economic output to 200 per cent or above within the next forty years.

This figure is expected to rise due to the cost of servicing public sector pensions, ballooning social security and overwhelming healthcare pressures.

Although the organisation calculated two years ago that the effects of an aging population, alongside high pensions and healthcare costs could push Britain's net debt up above 150 per cent by 2050, it now fears the added cost of the recession, which means debt could soar to problems seen in 1945.

The warning links to research displaying that the true size of the UK's unfunded public sector pensions deficit, which needs to be funded through taxpayer's cash, is now £1,177bn - a staggering £20,000 for every person in the UK.

A nation facing an uphill financial struggle

Moritz Kraemer, head of ratings in Europe, Middle East and Africa, said the UK was facing a double challenge - first, to mend its books in the wake of the economic downturn and then to overhaul its economy drastically to stifle the pensions crisis. He noted that Britain was facing deficits unlike any before in peacetime history.

"We don't think they are willing to look into this fiscal abyss without taking any action. Following the financial crisis, the proportion of the problem is significantly larger than we thought but the Government has time to react to address these issues. The shortfall may mean having to raise taxes, cutting public pensions or healthcare spending," he said.

The agency said that unless the UK and its fellow leading Western nations took action to reduce these expenses, "the ratings of the high grade sovereigns would be very different."

Although the UK is the only country on so-called "negative outlook", meaning the agency is considering stripping it of its AAA rating for the first time, Mr Kraemer said the gold-plated rating could be salvaged if the next Government proves it is willing to bring the public accounts back in order.

He added: "We take pre-election pledges with a pinch of salt; they don't always materialise. Actions speak louder than words. It's easy to come up with solutions on paper but difficult to make them stick."

An opinion poll at the weekend claimed that 79 per cent of the general public say spending should fall, in light of the recession.

The Bank of England governor, Mervyn King, told MPs last week that he wanted to see tougher action to cut the "extraordinary" levels of public borrowing, while he warned that a recovery was "more uncertain than ever" and he appeared to blame the Prime Minister for the UK's unawareness to weather the economic storm.