Gordon Brown's longstanding claim to the mantle of economic competence was mocked yesterday by his rivals, after it emerged the UK government is considering relaxing his vaunted fiscal rules to allow borrowing to rise.
The British prime minister built his reputation during a decade at the Treasury from 1997-2007, working with fiscal rules designed to lock in financial stability.
But yesterday the Financial Times disclosed the Treasury was considering loosening Mr Brown's rules to avoid the near certainty that they will be broken, as the British economy weakens and borrowing rockets.
Public sector borrowing surged by £9.2bn ($18.4bn, €11.6bn) last month - much higher than expected by the City of London - prompting the Conservatives to proclaim "the end of the Brown era of economics".
Mr Brown, whose mantra as chancellor of the exchequer was "prudence", now faces the embarrassment of changing his rules to accommodate surging borrowing. An announcement of the new rules could come in the autumn.
The alternative could be even more damaging for the prime minister, who wants to avoid imposing tax rises or public spending cuts during a downturn, not least when a general election is expected in 2010.
"He staked his credibility on the fiscal rules," said George Osborne, opposition finance spokesman. "They were part of the arrangement he made a decade ago to constrain government and to make sure money was put aside in good years to prepare for bad years.
"Now we've reached those bad years, the public finances are in a mess and the rules are being ditched. It's like giving the prisoner the keys to their own prison cell."
Britain, together with Hungary, has been labelled by the European Commission as a fiscal bad boy, as the UK's budget deficit looks set to rise above the EU's 3 per cent of GDP limit.
Mr Brown has always argued that Britain can afford to run relatively high annual deficits because of its low levels of long-term public debt.
According to the IMF's world economic outlook, Britain's net debt stands at 38.9 per cent, compared with a eurozone average of 45.9 per cent. France's figure stands at 54.9 per cent, Germany's at 57 per cent and the US at 47.9 per cent.
The UK Treasury insists it was always its intention to revise the fiscal rules at the end of the economic cycle - an elastic concept, dreamt up by the Treasury itself, which is set to be defined as having lasted from 1997 to spring 2007.
That would allow the UK government to revise upwards its 40 per cent of GDP debt limit, which represents Mr Brown's sustainable investment fiscal rule. That limit looks certain to be breached during the next few years in any case.
Opposition parties are proposing that Britain's fiscal framework should, in future, be entrusted to an independent body, to ensure that borrowing is cut during economic upswings to prepare for bad times.
Mr Brown's spokesman yesterday insisted no decisions on the future framework would be announced until the government's pre-Budget report in the autumn.
