Bird flu threatens to cause a “catastrophic” economic crash in Britain and around the world, unprecedented in modern times, according to new research.

Two studies from Nottingham University and the Bank of Montreal in Canada show that a flu pandemic – described by the World Health Organisation last week as inevitable – would slash at least £95bn from British GDP, extinguish at least 900,000 jobs and create a global depression to rival that of the 1930s.

They come as world leaders attending the United Nations summit last week began to recognise the scale of the potential threat from the influenza virus, codenamed H5N1, which has reached the borders of Europe.

President George Bush has launched an International Partnership on Avian and Pandemic Influenza, under which countries – including the US, Britain, Australia, Canada, China and Russia – and UN agencies will pool resources and expertise to try to head it off. His administration announced that health ministers from around the world would shortly meet in Canada to back the initiative.

Bird flu, which originated in China and South-east Asia, is being spread by migrating wildfowl, infecting domestic poultry. The UN’s Food and Agriculture Organisation warned this month that it will reach every continent. Last week Russia reported a third outbreak among chickens in Chelyabinsk in the Urals, on Europe’s doorstep.

So far about 60 people are known to have died from the virus, about half of those infected. Experts fear that it will mutate to spread rapidly among people, killing tens – perhaps hundreds – of millions worldwide. Last week Dr Lee Jong-wook, director-general of the World Health Organisation, said the mutation was inevitable and “just an issue of timing”. Publicly the Government says that more than 50,000 people are likely to die in Britain, but privately it is preparing for up to 750,000 deaths. Earlier this year Professor Hugh Pennington, one of the country’s experts, said that the British death toll could reach two million.

The Nottingham University study was commissioned for an edition of the ITV programme Tonight with Trevor McDonald, which will be screened tomorrow and features The Independent on Sunday’s campaigning coverage of the issue.

The study used a giant computer model of the British economy. It found that even a relatively mild pandemic, with 50,000 deaths, would cut Britain’s GDP by a staggering 8 per cent or £95bn, cost 941,000 jobs, and “affect every aspect of life in Britain”.

Professor Thea Sinclair, who led the research, says that a more serious pandemic, killing hundreds of thousands or millions of Britons, would have “truly catastrophic” effects on the economy.

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