London, Sept. 2 : British Home Secretary Jacqui Smith has warned that violent crime, racial hatred and terrorism will rocket because of the credit crunch.

According to Smith, the economic meltdown could see Brits turning on immigrants as they struggle to make ends meet.

The turmoil is forecast in a secret letter from Smith to Prime Minister Gordon Brown, reports the Daily Star.

The leaked document also reveals there will be fewer police to deal with the predicted crime rise on Britain''s streets.

The Home Office was asked to assess the impact of the credit crunch and the letter was ready to be signed off before it was sent to Downing Street.

The leak is another slap in the face for Brown, who has been telling people not to panic as he struggles to repair the crumbling economy.

The Home Office also warns of a rise in muggings and burglaries. This could lead to foreigners being separated from communities and encourage terrorist groups to recruit them.

Shadow Home Secretary Dominic Grieve said: "It is deeply disturbing that a department as shambolic as the Home Office is already facing such problems. The consequences of Gordon Brown''s mismanagement of the economy will not just hit families in the pocket but will also threaten their security." (ANI)