During a campaign stop in Northern Ireland, where she and rival candidate Rishi Sunak sparred in the eighth of 12 Tory hustings, Ms Truss was challenged about her earlier statement that there was a "fundamental issue with British working culture... what needs to happen is, you know, a bit more graft".
The comments, revealed by the Guardian and dating from Ms Truss's time at the Treasury between 2017 and 2019, were described as a "total disgrace" by the opposition and jolted her campaign as the race to be Britain's next prime minister nears its final stages.
Ms Truss, now the foreign secretary, responded by saying in Northern Ireland that Britain needed more investment and skills and to "help more people get into work... we have a number of people across the country who are currently economically inactive".
"I’m fundamentally on the side of people who work hard, who do the right thing," she said.
During the hustings, Ms Truss said she was determined to steer the Northern Ireland Protocol bill through Parliament, despite stiff opposition to a move that would unilaterally discard part of the Brexit deal with the European Union.
Mr Sunak said there was not much between the candidates on that point, but said he would negotiate with the EU, France and the Republic of Ireland to seek a swifter resolution if possible because the bill "will take time to pass".
The EU accuses Britain of breaching international law by going back on its commitments under the protocol, designed to keep goods moving across the Irish border and avoid inflaming sectarian tensions by bringing in new checks.
The leaked recording comes as Ms Truss emphatically leads rival Rishi Sunak in polls for the race to become prime minister when Boris Johnson stands down early next month.
Ms Truss said in the recording that workers' "mindset and attitude" were partly to blame for the UK's relatively poor productivity.
The two-minute audio clip dates from her time as a senior minister in the finance ministry between 2017 and 2019.
"It's working culture basically," Ms Truss said in the recording obtained by The Guardian newspaper, adding British workers needed "more graft".
"If you go to China it's quite different, I can assure you," she said. "There's a fundamental issue of British working culture … I don't think people are that keen to change."
She also raised regional hackles by saying that productivity was "very, very different in London from the rest of the country".
"It's a total disgrace, what Liz Truss has said. I think it reveals what she really thinks," said Yvette Cooper, a senior MP in the opposition Labour Party.
"She has absolutely no idea that people are working incredibly hard... who are facing these nightmare inflation figures, these soaring energy bills and doing their best to keep everything together."
A Truss ally, former chancellor Sajid Javid, said British workers were "among the hardest-working in the world" but said Ms Truss was right to flag up low productivity.
Asked about the regional disparity, he told Sky News: "I think what she's talking about is business and investment... if we don't increase our growth rate, we won't be able to pay for those investments."
The party's up to 200,000-strong membership has already starting voting for their next leader, who then becomes prime minister.
The result of the summer-long contest will be announced on September 5, with the new leader set to take charge the following day.
The two leadership contenders, who have waged a bitter battle over recent weeks featuring hostile briefings and counter-briefings by their camps, headed across the Irish Sea after a campaign stop in Scotland on Tuesday evening.
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Ms Truss's remarks echo controversial arguments made in a 2012 book she co-wrote, Britannia Unchained, in which British workers were described as among the "worst idlers in the world".
Asked about it at a leadership debate last month, she distanced herself from the contentious assessment, claiming co-writer and Sunak supporter Dominic Raab, who is Justice Minister, had penned it.
Mr Raab has subsequently said the writers of the book, which included several other senior Conservative ministers, had agreed on "collective responsibility" over its contents.
In the audio, Ms Truss — who supported staying in the EU during the divisive 2016 referendum before later becoming a Brexit supporter — also appeared to suggest the bloc and migration were unfairly criticised.
"We say it's all Europe that's causing all these problems. It's all, 'It's migrants that's causing problems'.
"But actually what needs to happen is, you know, a bit more graft," she said with a laugh, before adding: "It's not a popular message".
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A Truss campaign source branded the leaked comments "half-a-decade-old" and lacking context, while saying that Britain does "need to boost productivity".
"As prime minister, Liz will deliver an economy that is high wage, high growth and low tax," the source said.