George Osborne has been accused by Britain's new Nobel Prize winning economist of having "exaggerated" the risk of a Greek-style debt crisis.
Professor Christopher Pissarides said that the prospects of a sovereign debt crisis hitting Britain were "minimal".
In an article for the Sunday Mirror, he warned that the Chancellor's swingeing cuts package announced last week was taking "unnecessary risks" with the economy.
Mr Osborne has said drastic action to tackle the deficit was necessary to avoid a Greek-style collapse in investor confidence, leaving Britain facing punitive interest rates to finance its borrowing.
However, Prof Pissarides said that he believed the Chancellor had over-stated the dangers.
"It is important to avoid this 'sovereign risk'. But in my view Britain is a long way from such a threat, and the Chancellor has exaggerated the sovereign risks that are threatening the country," he said.
He said that Mr Osborne should have been more concerned about the current weakness of the UK economy.
"Unemployment is high and job vacancies few. By taking the action that the Chancellor outlined in his statement, this situation might well become worse," he said.
"These risks were not necessary at this point. He could have outlined a clear deficit-reduction plan over the next five years, postponing more of the cuts, until recovery became less fragile. The 'sovereign risk' would have been minimal."
He added: "Overall, the Chancellor is putting the economy through some unnecessary risks because of his fear of sovereign risk, which does not appear justified."
George Osborne has been accused by Britain's new Nobel Prize winning economist of having "exaggerated" the risk of a Greek-style debt crisis.
Professor Christopher Pissarides said that the prospects of a sovereign debt crisis hitting Britain were "minimal".
In an article for the Sunday Mirror, he warned that the Chancellor's swingeing cuts package announced last week was taking "unnecessary risks" with the economy.
Mr Osborne has said drastic action to tackle the deficit was necessary to avoid a Greek-style collapse in investor confidence, leaving Britain facing punitive interest rates to finance its borrowing.
However, Prof Pissarides said that he believed the Chancellor had over-stated the dangers.
"It is important to avoid this 'sovereign risk'. But in my view Britain is a long way from such a threat, and the Chancellor has exaggerated the sovereign risks that are threatening the country," he said.
He said that Mr Osborne should have been more concerned about the current weakness of the UK economy.
"Unemployment is high and job vacancies few. By taking the action that the Chancellor outlined in his statement, this situation might well become worse," he said.
"These risks were not necessary at this point. He could have outlined a clear deficit-reduction plan over the next five years, postponing more of the cuts, until recovery became less fragile. The 'sovereign risk' would have been minimal."
He added: "Overall, the Chancellor is putting the economy through some unnecessary risks because of his fear of sovereign risk, which does not appear justified."