LONDON (AP) — Britain is limping into the New Year still officially in recession as its recovery from the global credit crunch lags behind the US, the European Union and just about every other major economy.

Modest growth is forecast for 2010, but convincing voters who is best to lead the long slog ahead will define Prime Minister Gordon Brown's bid to win an increasingly closely contested general election.

The hesitant nature of Britain's return to growth from its worst downturn since World War II was underscored yesterday by statistics showing the economy shrank less than previously estimated in the third quarter — but still fell short of economists' expectations for improvement.

In its third and final revision for the July to September quarter, the Office for National Statistics reported that gross domestic product contracted 0.2 percent.

That was better than earlier estimates that first put the contraction at 0.4 percent, then 0.3 percent, but worse than predictions ranging from a 0.1 percent shrinkage to a 0.2 percent expansion. A positive figure would have officially ended the recession.

"Serious economic and financial obstacles to significant, sustainable growth remain, and we suspect that recovery will be gradual and prone to losses of momentum," said IHS Global Insight chief UK economist Howard Archer.

Brown's Labour government is pegging its hopes for electoral success on its belief that the need to support economic recovery outweighs the immediate desire to bring down a burgeoning budget deficit.

It's a strategy that provides a clear split with the main opposition Conservative party — Brown has acknowledged that Britons face a "profound choice" at the poll with "two competing visions about managing our economy through and out of recession, two competing visions about a fair society."

The Conservatives want the blowout in the budget deficit to be addressed much quicker to prevent long-term damage to the economy and have already announced they will hold an emergency budget within 50 days of coming to power if they win the election, which must be held by June. The deficit has reached 83.2 million pounds so far this year and the International Monetary Fund expects it to peak next year at 13.2 percent of gross domestic product, the highest level in the Group of 20 leading industrialised and emerging nations.

But even after a warning from Moody's Investors Service that Britain needs to curb borrowing to keep its top-grade AAA rating, the government's policy appears to be winning favor with voters.

An ICM Ltd. survey conducted in mid-December found that 31 percent of people supported Labour, compared with 40 percent for the Conservatives — a narrowing of two percentage points from a survey a month earlier.

Some analysts now suggest a Labour victory is not as impossible as thought just months ago, or that a hung parliament is a possibility. Either outcome would be something of a vindication for Brown, the former Treasury chief who was hailed by other world leaders as the voice of reason at the start of the global credit crunch.

In contrast to his standing internationally, Brown, who succeeded Tony Blair to the top job in May 2007, found his reputation at home took a battering as Britain was hit harder than other major economies.