Eurozone economies have faced fresh pressure from credit rating agencies as the UK hit back at "simply unacceptable" calls by senior French politicians for London to be put under tougher scrutiny.
Nick Clegg told French prime minister Francois Fillon to "calm the rhetoric" as attempts by France to defend its cherished AAA rating saw cross-Channel relations plunge to new lows.
The Fitch agency said on Friday night that it was keeping Paris in the highest band but giving it a negative outlook after concluding a comprehensive solution to the single currency crisis was "beyond reach".
Standard and Poor's is still reviewing several countries' ratings including France, and another, Moody's, downgraded Belgium's debt by two notches as the crisis continued to bite.
Downing Street, which has declined to retaliate to a string of digs at the UK, made clear on Friday night that it stood fully behind the Deputy Prime Minister's rebuke.
Mr Fillon had joined the head of the French central bank in questioning why France's rating was under threat when the UK was "even more indebted than us and carrying a bigger deficit". "What I see is that the ratings agencies so far don't seem to have noticed," he said.
French finance minister Francois Baron further inflamed the situation by calling the UK's situation "very worrying" and suggesting France was better off economically.
The spat has been given momentum by Prime Minister David Cameron's dramatic veto of efforts to agree a pan-European Union deal to rescue the single currency. French President Nicolas Sarkozy is quoted as branding him an "obstinate kid" for refusing to sign up.
Mr Clegg's angry retort came when the French prime minister called from a visit to Brazil to insist he had not intended to call into question the UK's credit rating. "Fillon made clear it had not been his intention to call into question the UK's rating but to highlight that ratings agencies appeared more focused on economic governance than deficit levels," a spokesman for Mr Clegg said.
"The Deputy Prime Minister accepted his explanation but made the point that recent remarks from members of the French government about the UK economy were simply unacceptable and that steps should be taken to calm the rhetoric. PM Fillon agreed and they both undertook to speak again shortly to discuss economic co-operation."