Senior retailers are backing the coalition’s public spending cuts saying that anything less would result in £100bn of additional debt, a rise in interest rates and further tax rises.

In a letter to The Daily Telegraph today, 35 business leaders urge the Government not to hesitate or water down plans to tackle the budget deficit.

Among those signed are Asda chairman Andy Bond, Carphone Warehouse chairman Charles Dunstone, Next chief executive Lord Wolfson, Marks & Spencer chairman Sir Stuart Rose and Alliance Boots executive chairman Stefano Pessina.

They say failing to take urgent action to cut Britain’s debt would lead to the international markets losing confidence in Britain, with disastrous consequences for the economy.

The backing from the City will be a boost to chancellor George Osborne, who will deliver his Comprehensive Spending Review on Wednesday to make £83bn savings in state spending.

In the letter, it reads: “Everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better.

“The cost of delay is enormous, and would result in almost £100bn of additional national debt by the end of this Parliament alone.

“In the end the result of delay would be deeper cuts, or further tax rises, in order to pay for the extra debt interest. The cost of delay could be even greater than this.

“As recent events in some European countries have demonstrated, if the markets lose faith in the UK, interest rates will rise for all of us.”

Wolfson, who drafted the letter, offers reassurances that job losses in the public sector will be absorbed by the private sector.

Other names to sign the letter include Dunelm chief executive Will Adderley, LK Bennett chairman Robert Bensoussan, Kingfisher chief executive Ian Cheshire, Mothercare chief executive Ben Gordon, Asos chief executive Nick Robertson, Ocado chief executive Tim Steiner and Harvey Nichols chief executive Joseph Wan.

The coalition received a further boost today with the publication of an Ernst & Young Item Club report that says the likelihood of a double-dip recession in Britain has been exaggerated. It said: “The economy is likely to slow over the winter following a surprisingly positive first half of the year, but I think this will be a soft patch, not a double dip.”