Lord Oakeshott has dismissed George Osborne as a "work experience" chancellor and insisted Vince Cable should be handed his job.
A close ally of Business Secretary Vince Cable, Oakshott called on Wednesday for Osborne to be ejected from the Treasury in the wake of dire GDP figures.
Interviewed on BBC Radio 4's World at One, the Liberal Democrat peer said: "George Osborne has got no business experience.
"He has never worked outside politics. He is doing surprisingly well for a chancellor on work experience.
"But really in a torrid time like this I think we do need absolutely the best people available."
Cable rejected Lord Oakeshott's call for a change of personnel at the Treasury.
Asked whether he thought the Government had an "A-team" of ministers at the Treasury, Cable said: "Yes, I think we do - an excellent team. We work together very well."
Commenting on Lord Oakeshott's remarks, Cable said: "He is not an adviser. He is a personal friend I have known for many years, but he is an independent political and economic commentator with strong views of his own. I don't happen to agree.
"We have a very good team in the Government and the Treasury and I work very harmoniously with them."
Lord Oakeshott said the 0.7% contraction reported for the last quarter was "dismal", and suggested the UK economy was going into "cold storage".
Asked if he wanted to see changes in the coalition's Treasury team, he said: "When we started in government we had three Liberal Democrat Cabinet ministers out of five, Vince Cable, Chris Huhne, David Laws, all of whom were acknowledged economic experts with lots of business experience.
"At the moment we have only got Vince in there now. But I would hope at the next reshuffle, if David Laws and Chris Huhne were available, hopefully that they, with Vince, could be very much at the heart of economic policy-making."
He said "personally" he would like Cable to take over as chancellor.