Barack Obama, the US president-elect, has warned that the struggling US economy could be in recession for years unless politicians agree a massive economic stimulus plan.

Obama, who takes office on January 20, has pledged to change US economic policy, and is set to introduce a new stimulus plan containing tax cuts and public spending that could total almost $800bn.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said at a speech in Virginia on Thursday.

A new government report released on Thursday showed that the number of people continuing to claim jobless benefits jumped unexpectedly last week by 101,000 to 4.61 million, the highest level since November 1982.

In addition to tax cuts for families and businesses, the plan would pay for construction and repair of roads and schools and provide aid to US cities and states, Obama said.

Obama has previously said he was considering a plan in the range of $775 billion, though he has suggested the final cost could exceed that.

He gave no precise figure in Thursday's speech although Obama listed $1,000 tax cuts for middle-class families as one element of the package.

Wall Street warning

The US president-elect also once again promised tougher regulations on Wall Street traders.

"No longer can we allow Wall Street wrongdoers to slip through regulatory cracks.  No longer can we allow special interests to put their thumbs on the economic scales," he said.

Wall Street firms have come under renewed scrutiny after the global financial crisis rocked world markets last year.

The crisis hit a US economy already struggling in the wake of the subprime mortgage crisis, which occured after millions of Americans were granted high-interest mortgages they were unable to repay.

A report on Wednesday showed the fiscal deficit for 2009 would triple to around $1.2 trillion, even before taking into account the cost of the stimulus package.