And Brits could suffer the costs through tax rises and public sector pay freezes that last two years.
It could also spell the end of the triple lock on the state pension, which guarantees the state pension will rise by at least 2.5% each year.
The leaked documents were drawn up by chancellor Rishi Sunak.
They were dated May 5 and marked “Official – market sensitive,” according to the Telegraph.
In the scenario considered most likely, the country’s budget deficit this year would be £337bn.
However, just £55bn was forecast in March’s budget.
The government’s focus is on supporting families and businesses through this difficult period.
As a result, reducing that deficit would mean tax rises and spending cuts to raise up to £30bn annually.
What it means for Brits
For Brits, this could mean the equivalent of a 5p increase in the basic rate of income tax.
The documents also stated a best-case scenario. However, even that would see the country with an annual deficit of £209bn.
The worst-case would see it rise to £516bn this year and the national debt rise by £1.19 trillion over the next five years.
It’s reported that Rishi – who yesterday announced the furlough scheme would run into October – could be set to announce the plans in a matter of weeks.
The announcement would “enhance credibility and boost investor confidence” in the UK economy, the documents state.
However, the Treasury has dismissed the leak and said the document was one of many put together to discuss “ideas” about what the future may hold.
A rep said: “The government’s focus is on supporting families and businesses through this difficult period.”
They added: “That’s why we announced an extension to the furlough scheme, which has already saved millions of jobs.”
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