George Osborne is facing renewed demands from the Tory rank-and-file for tax and spending cuts after Britain was stripped of its prized AAA credit rating.
Ministers and senior party figures rallied round the Chancellor in the wake of the decision by agency Moody's, predicting it will have little impact on the Government's borrowing costs.
But Conservative backbenchers warned that next month's Budget was the "last chance saloon", demanding cuts to corporation tax and capital gains to revive the economy.
Meanwhile, Labour reiterated its calls for borrowing to be increased in the short term to fund a fiscal stimulus.
Explaining its move on Friday, Moody's pointed to "subdued" growth prospects in the UK and a "high and rising debt burden". It now expects the "period of sluggish growth" to "extend into the second half of the decade".
Speaking on the BBC's Andrew Marr Show, Business Secretary Vince Cable dismissed the downgrade as "largely symbolic", adding: "In terms of the real economy there is no reason why the downgrade should have any impact. If you remember last year the US was downgraded, the economy grew strongly relative to Europe... and France had a downgrade last year, its interest rates that it borrows long term in the markets are only a little above ours.
"These things do not necessarily affect the real economy but they reflect the fact that we are going through a very difficult time and we are trying to balance the need to get the deficit and the budget under control with the need to get back to economic growth."
Mr Cable also flatly ruled out deeper spending cuts, suggesting that kind of policy was coming from "right-wing ideologues".
Former Labour chancellor Alistair Darling said he had been "extremely doubtful" of the Government's strategy ever since 2010. He told Sky News' Murnaghan programme: "I think that when they were elected they very unwisely staked their reputation on maintaining the AAA credit rating that they had, they compared us to Greece, they said they could eradicate the structural deficit by 2015.
"These were wildly optimistic claims and they were perhaps made because of inexperience and maybe a touch of recklessness. But the result is that they have sustained quite substantial political damage, but more importantly for the country the economic harm of yet another another blow to confidence. I think that is very, very important, they have been following the wrong economic strategy, but they are paying a very, very heavy price for it."