Much as I would like to see Adam's project tried, I can't advocate further public sector borrowing.

In our updated forecasts we expect the weaker economic outlook to increase public sector borrowing and debt.

When economic recovery has reached a certain stage, the time may come to roll back public sector borrowing.

"The continuing rise in unemployment and a leap in public sector borrowing means misery all round," he says.

He said spiralling public sector borrowing was the greatest threat to a sustained economic recovery.

One doesn't raise taxes with enthusiasm, but the alternative is public sector borrowing going through the roof.

Only a huge drop in interest rates could accomplish such a switch to private sector borrowing.

Britain is still gripped by recession, public sector borrowing is high, inflation running at 4.1pc and there are 2.6m registered unemployed.

Debt financing for public sector borrowing amounted to $20.3 billion in 1992-3 and was also projected to rise.

A major policy aim of the government has, therefore, been to reduce public sector borrowing.