British row over leaked EU deficit report

(LONDON) - Britain's Labour government came under fire from opposition Conservatives on Tuesday as a leaked European Commission report suggested that the public deficit needs cutting faster than anticipated.

The Tories leapt on excerpts from the report, due to be published on Wednesday, suggesting that current plans were not ambitious enough.

"This is a heavy blow for Gordon Brown's credibility," said George Osborne, who hopes to become Britain's finance minister if the Conservatives win general elections expected on May 6.

The EU commission report, leaked to British media, said: "The fiscal strategy in the convergence programme is not sufficiently ambitious and needs to be significantly reinforced.

"A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned."

Osborne stressed the need to cut Britain's record deficit more quickly, saying: "Our argument is backed by credit rating agencies, business leaders, international investors and now the European Commission.

"That is why we need a change of government to restore confidence in our economy at home and abroad," he said.

But finance minister Alistair Darling countered that the government was right to maintain fiscal stimulus measures for longer to sustain economic recovery after the global slowdown.

"Most people know that having come through a huge downturn ... of course there's going to be some tough decisions that are going to have to be made," he told Sky News television.

Attacking Conservative plans to withdraw fiscal support more quickly if they oust Prime Minister Gordon Brown's government in May, he said: "To kick away the support now ... would be absolute madness."

Britain's state borrowing is expected to balloon to a record 178 billion pounds (203 billion euros, 283 billion dollars) in the 2009-2010 financial year.

Brown has stated that he wants to more than halve the deficit over the next four years.

The dire state of Britain's public finances is partly the consequence of multi-billion-pound banking bailouts in the wake of the financial crisis.

The public purse has also been slammed by weak taxation revenues, which sank in the face of a fierce recession that ended in the final quarter of 2009.