The world risks economic "catastrophe" if governments persist in their policy of collective austerity, shadow chancellor Ed Balls has warned.
Mr Balls called for a change of course at the G20 summit in France next week to rein in austerity measures to boost confidence, growth and jobs.
At their meeting in Cannes next Thursday, the leaders of the world's 20 major economies should show leadership like that of US president Franklin Roosevelt when he launched the New Deal to see off depression in the 1930s, said Mr Balls.
The New Deal involved major state investment in infrastructure projects to stimulate the economy, relief for the poor and unemployed and thorough-going reform of the banking sector.
Writing in The Independent, Mr Balls said: "The world badly needs a change of course at the forthcoming G20 summit.
"We need a new deal based on the understanding that collective austerity risks catastrophe and that, as the IMF's Christine Lagarde has rightly warned, 'slamming on the brakes too quickly will hurt the recovery and worsen job prospects'.
"A new deal that includes credible but steadier, more balanced deficit reduction plans to support the growth and jobs the world needs now - all of which should be agreed when the G20 meets in Cannes next week.
"If we are to avoid repeating the mistakes of that 1930s lost decade, then the world badly needs a 'new deal' - and soon. But from where will the leadership come? And how long will we have to wait?"
Mr Balls, who launched his call for a global new deal in a speech in New York on Wednesday night, warned that the UK's coalition Government lacked the flexibility to change economic policy, despite evidence that growth was stalling and unemployment rising.
"Austerity is not working in Britain. But the UK's peculiarly British problem is that the coalition is locked into a rigid agreement on the deficit and fears that any change of course might undermine the political foundations upon which it was built - the very reason it came together in the first place," he said. "This can't go on."