LONDON (Reuters) - Much is being made of a warning by British finance minister Alistair Darling over the economy this weekend but the reality is the characteristically candid Scot was not saying anything new.

The British media ran riot after Darling's comments were published in Saturday's Guardian newspaper, saying the economic challenges facing the world were the greatest in 60 years.

The Guardian quoted Darling in broken sentences, saying the economic times "are arguably the worst they've been in 60 years ... and I think it's going to be more profound and long-lasting than people thought."

Headlines immediately proclaimed the finance minister had admitted the British economy was about to go into its most savage downturn since World War Two and commentators started questioning Darling's motives and future.

"Some have interpreted this as a statement that the economy will be the weakest for 60 years. But, this is not actually what the Chancellor said," said Michael Saunders, economist at Citigroup.

"Rather, he appears to have argued that the economic challenges (credit crunch, commodity price surge) are the greatest for 60 years."

The Treasury was caught off-guard by the flurry of media interest which kicked off on Friday night as details of the interview came out. The comments were taken from a "soft" interview for the Guardian's weekend magazine two weeks previously.

They were not meant to signify any shift in policy. Instead, the purpose was to show a more relaxed image of Darling as the reporter spent a couple of days with the finance minister and his wife at a family getaway on a remote Scottish island.

"The Chancellor's comments about the economy are entirely consistent with his previous statements about the challenging times the UK is currently facing," said a Treasury spokesman.

"These are the same difficult economic circumstances that every other country in the world is having to deal with."

The journalist behind the piece was herself surprised by the explosive reaction to her piece which was conducted "on sofas in front of his an open peat fire with his wife cooking lunch next door."

"He basically told the truth — and far away from Westminster, it didn't seem that shocking," she wrote in yesterday's Guardian.

Still, Darling looks certain to lower his economic growth forecasts in his pre-budget report in the autumn to reflect changing circumstances since the March budget — the economy failed to grow in the second quarter.

Officials were furious over the coverage. A Treasury source said the headlines had misrepresented what Darling was saying.

While Darling sought to clarify his comments with a string of broadcast interviews, the damage was already done and sterling fell in Asian trade with dealers citing the finance minister's pessimistic comments on the UK economy.

Speculation, meanwhile, rose that there was a rift between Darling and his boss Prime Minister Gordon Brown with some papers reporting that Darling could soon be moved out of his job and replaced by schools minister Ed Balls.

Officials said such talk of conflict between Brown and his close ally was just hot air, though the prime minister's office, like the treasury, had wanted Darling's comments to be clarified quickly. An imminent ministerial reshuffle looks unlikely.

Brown's Labour Party is currently trailing the opposition Conservatives by around 20 points in the opinion polls as confidence in him has crumbled in the wake of the economy faltering and house price sliding.