The public sector accounted for 52 per cent of gross domestic product last year, up from just 40 per cent in 1997, according to figures from the Organisation for Economic Co-operation and Development (OECD).
The figures comes Chancellor Alistair Darling, appearing on the BBC's Andrew Marr show yesterday, flatly dismissed calls to go 'further and faster' on Wednesday to rein in the unprecedented deficit.
The OECD predicts the steep rise in public sector employment, fuelled by higher taxes, will continue to rise over the next two years as more recession-hit people rely on state handouts.
Only France and Sweden have a higher rate of public spending, which does not include the cash used to prop up the bailed out banks.
No doubt the USA will be moving up on this list shortly.