Gordon Brown will call today for a co-ordinated programme of tax cuts by the world's leading economies to limit the impact of the global downturn.

The Prime Minister will argue that a "fiscal stimulus" and a breakthrough on stalled talks on a world trade deal could help avert deep global recession. He will meet 19 other leaders in Washington to discuss the economy and how to prevent a repeat of the financial crisis.

Although detailed decisions would be left to individual governments, Mr Brown hopes that broad agreement on tax cuts to keep the major economies moving would make it easier to justify lower taxes planned for the pre-Budget report on 24 November.

Mr Brown is worried that the impact of tax cuts in stimulating economic activity will be diluted unless such measures are taken up around the world. Arriving in New York last night, he said: "There is a need for urgency. The cost of inaction will be far greater than the cost of any action."

He added: "It is becoming increasingly accepted around the world that a temporary and affordable fiscal stimulus is necessary. This will have the most impact if it is co-ordinated internationally. By acting now we can stimulate growth in our economies."

But the Tories seized on a pledge by the Chancellor, Alistair Darling, in an interview in The Independent yesterday to bring tax and spending back under control in the medium term. They said it was an admission that taxes would have to rise to fund higher-than-expected borrowing. George Osborne, the shadow Chancellor, said: "The truth is now coming out. First the Employment minister [Tony McNulty] told us that taxes would have to rise to pay for any unfunded tax cut. Now the Chancellor has hinted that under the Prime Minister's plan, taxes would have to rise.

"Only the Prime Minister refuses to admit that what he is proposing is not a tax cut but a giant tax con. Once again he is taking the British people for fools."

In New York, President Bush acknowledged that the financial system was in need of reform, but rejected the idea that the free market approach was responsible for the credit crisis.

Speaking ahead of the crucial meeting in Washington, Mr Bush said that world leaders should seek to better regulate financial markets, but should avoid trying to "reinvent the system".

The 20 leaders, who will have a working dinner at the White House tonight before a formal summit tomorrow, will meet against an increasingly gloomy economic backdrop.

Yesterday, the Paris-based Organisation for Economic Co-operation and Development (OECD) said the world's developed economies have already slid into recession and will shrink further next year. Its latest forecasts said gross domestic product was likely to fall by 0.3 per cent in 2009 for its 30 member countries. It said the US economy would contract by 0.9 per cent, Japan's by 0.1 per cent and the euro area by 0.5 per cent.

After a series of big interest rate cuts by central banks, the OECD said it was time for more governments to boost their economies by a "fiscal stimulus" in the form of tax cuts or increased public spending. The OECD's bleak assessment came as Germany sank into recession. Official figures showed that Germany's GDP contracted by 0.5 per cent in the July-September period compared with the previous quarter. The fall was much steeper than the 0.2 per cent predicted by economists.

Mr Brown will call for sweeping reforms of bodies such as the International Monetary Fund to ensure that lessons are learnt from the crisis. But decisions will have to wait until after Barack Obama takes over as US president on 20 January. This weekend's meeting is being hosted by George Bush and Mr Obama has disappointed the 19 visiting leaders by declining to join them – even for an informal "hello" session. "You had 19 leaders all desperate for a one-to-one meeting with Obama," one diplomat said. However, representatives of Mr Obama's team will attend the summit.

Last night Mr Brown held talks in New York with Ban Ki-moon, the UN Secretary General. The Prime Minister signalled his support for the deployment of more UN peacekeepers to prevent a "human catastrophe" in the Democratic Republic of Congo. Mr Ban has asked the UN Security Council for an extra 3,000 troops to strengthen the 17,000-strong force in the Congo.

Although British troops will not be deployed, officials said the UK would contribute up to £6m to the mission.