Vince Cable renewed his call for billions of pounds more infrastructure investment funded by higher borrowing, saying the Government had to "really get moving", at the Lib Dem Party Conference in Brighton.
The Business Secretary admitted there were dangers in pushing up the Government's debt in an effort to kickstart the economy but he insisted the "balance of risks" seemed to be changing and ministers had to be "open minded".
He also warned that Liberal Democrats would block any effort to cut crucial spending in areas such as science and skills, and said Tory efforts to reduce immigration were harming the economy.
The intervention came at a fringe event at the party's spring conference in Brighton. Kicking off the gathering on Friday, Nick Clegg denied the Lib Dems were in crisis in the wake of sexual harassment allegations and the conviction of ex-Cabinet minister Chris Huhne.
However, the Deputy Prime Minster conceded the party had "let people down" and needed to take a "long, hard look in the mirror".
Both David Cameron and Clegg dismissed the prospect of increasing borrowing to fund more capital investment earlier this week after Cable floated the prospect in a pre-Budget essay in the New Statesman.
However, Cable made light of the reaction last night, saying he noted the markets had not "collapsed" as a result.
"The point I was trying to make is that we need to be open minded and recognise that the balance of these risks may well be changing," he said.
Cable said the decision by the former Labour government to cut capital investment had been a major policy error.
He pointed out that a £15 billion increase in capital spending would restore it to peak levels - although he stressed the figure was "illustrative".
He added: "That's a useful figure, but I am not specifically recommending that."
Cable said he was on the "same page" as the Prime Minister, "but we have different emphasises and we use different language".
While Cameron used phrases like "trees don't produce money", he preferred to say there was "no such thing as a free lunch".
"There are risks in any policy option we care to take," he said.
"But nonetheless the conclusion I have drawn is that we have to look at how we can really get moving with investment in infrastructure and housing."
Cable has been listed with Tories Eric Pickles, Theresa May and Philip Hammond among ministers who are resisting further spending cuts but he insisted he did not "need lectures" about the importance of managing public finances.
But he criticised some on the Tory right for waging "jihad" on state spending and warned it would be "utterly counterproductive" to cut science and skills budgets any further. "Lib Dems in government will not allow that to happen," he added.
The Cabinet minister also attacked the Tory drive to reduce net annual immigration to tens of thousands, complaining that the Lib Dems were having to "live with" it.
"It is politically ineffective and it is causing a great deal of economic damage," he added, indicating that Mr Clegg would be making a speech on the issue.
Cable insisted more of the money needed to fill the deficit should be raised from taxes, rather than spending cuts.
He said the current ratio of spending cuts to tax rises was 80-20 or 85-15, and urged the introduction of measures such as the mansion tax, as well as a crackdown on long-term "non dom" residents.
"I think our view as a party must be that there has got to be a better balance between spending cuts and taxation," he said.
Party president Tim Farron will formally open the conference on Saturday morning, before a speech by former leader Lord Ashdown. Clegg is due to do a question and answer session with activists later.
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