Around 300 people a day will be plunged into insolvency this year, experts warned.
They fear record numbers will be forced to declare themselves bankrupt or resort to an alternative known as an Individual Voluntary Arrangement.
Official figures, published yesterday, show how the recession is 'starting to bite', amid warnings it is just the tip of the iceberg.
Companies are also paying the price for what the Bank of England warned this week is the worst economic crisis 'for almost a century'.
More than 4,000 firms collapsed into liquidation between July and September, up 26 per cent, according to the figures from the Government's Insolvency Service.
Shut up: Businesses are beginning to struggle now that the real economy has been hit by the credit crunch
The number of firms going into receivership - an attempt to rescue them from the brink - rocketed a staggering 238 per cent over the last year.
Between July and September, 270 firms went into receivership, compared to just 80 in the same period last year.
This is just the start of the corporate carnage, which will mean workers will lose their jobs at a time that unemployment is predicted to nearly double.
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