Brown readies budget with eyes on Downing Street

LONDON: British finance minister Gordon Brown was to present the budget on Wednesday, probably his last before his expected move up to replace Tony Blair as prime minister in a few months' time.

Chancellor of the Exchequer Brown, favourite to replace Blair in June or July, faced mixed news on the eve of the budget, with polls misery and harsh criticism from a former top aide published alongside reassuring economic data.

Brown was due to deliver his annual tax and spending programme before parliament at 12.30 pm (1230 GMT).

Brown has shown a 'Stalinist ruthlessness' and possessed a 'very cynical view of mankind and his colleagues,' civil servant Andrew Turnbull said in an unguarded interview in the Financial Times on Tuesday.

In a further blow, David Cameron, leader of the main opposition Conservative party, extended his opinion poll lead over Brown to 15 percentage points according to The Guardian newspaper website.

But relief came with data showing public spending narrowing in February. Net borrowing stood at 1.0 billion pounds (1.47 billion euros, $1.96 billion), down on a 1.7 billion pound deficit in the same month last year.

"This may allow the chancellor to lower his borrowing projections slightly for the coming years or provide some scope for a small scale boost to spending or cut in taxation," said economist Alan Castle of Lehman Brothers.

Brown is meanwhile likely to focus on the environment when he unveils his 2007-2008 budget to the nation.

"From a political perspective, it's Gordon Brown's last budget and there is a risk that he might try something a bit special, with a possibility that he looks further into green taxes," added George Buckley, an economist at Deutsche Bank in London.

"There's a lot of political interest surrounding this budget, on the assumption that he doesn't change anything in terms of government spending targets or (tax) receipts expectations," he added.

Amid concerns over high inflation and rising interest rates in Britain, Brown was expected to flag Britain's strong economic growth and on-track public finances.

Britain's longest-serving chancellor, without interruption, is widely forecast to take over from Blair in July or August, in time to fight the next general elections that are due before 2010.

Blair has agreed to stand down by September after a decade in power.

His eleventh tax and spending statement comes after a major government announcement on climate change last week. With increasing worries about global warming, the environment is suddenly regarded as a key vote-winner.