British public debt will double over the next five years, going from 40 percent to almost 80 percent of gross domestic product, according to budget figures announced by Chancellor of the Exchequer Alistair Darling on Wednesday.

Darling forecast that over the next year the UK economy will shrink at the fastest rate since the Second World War. Collapsing tax revenues mean that the government will have to borrow more money than that borrowed by any other peacetime government in the UK.

In his budget, Darling forecast that the economy will shrink by 3.5 percent this year but grow by 1.25 percent in 2010. To finance government spending, the public sector net debt is projected to reach £1,370 billion (us $2,014 billion) in 2013/14. When the Labor Party came to power in 1997, the debt was about a quarter of that: ₤350 billion (us $515 billion).

According to the chancellor’s predictions, in 2010/11 the interest on the national debt will cost taxpayers £42.9 billion (us $63.1 billion)—more than the annual budget of the Ministry of Defense. By 2013, according to accountancy firm Grant Thornton, debt interest will be an estimated £58 billion (us $85.3 billion)—more than the government spends annually on education.

But according to most economists, that forecast is far too optimistic.

After Darling released his budget, the International Monetary Fund (imf) predicted that the economy would instead shrink 4.1 percent this year. And rather than recovering in 2010, the imf said the economy would shrink by 0.4 percent. This kind of performance would push the public debt even higher than the Treasury’s predictions.

Willem Buiter writes in the Financial Times: “Including assorted off-balance sheet fudges, public debt in excess of 100 percent of gdp is therefore likely, even if we do not add the capitalized value of Britain’s unfunded public sector pension commitments, which are effectively contractual obligations.”

This shows just how bad of a shape the British economy is in. But it also raises the question, Where is the government going to get the money from?

Last month, the government failed to sell all of its debt it was offering at a bond auction. Although there were some exceptional circumstances surrounding the auction, it gives an indication of the trouble the government could soon have in raising money.

Former Chancellor Lord Lamont this week warned that there is now a “real risk” that the markets will just stop buying UK government debt. Jason Simpson, a bond strategist at the Royal Bank of Scotland, warned, “I don’t know if the market is deep enough to absorb all that issuance.”

Britain’s economy is in real trouble.

For more on the dire problems facing Britain today, and the warning for America they entail, read “Want to Know What a Former Superpower Looks Like?”