An influential committee of MPs has warned the Treasury that its economic growth forecasts are overly optimistic.
The Commons Treasury select committee published a report on Friday noting that the chancellor's growth predictions of between three and 3.5 per cent for next year are "notably more upbeat" than those of most economic experts.
The MPs have been alarmed at a stream of independent reports suggesting the government has got its figures wrong and is facing a "black hole" in its finances.
The Labour dominated committee fears that Gordon Brown will be left with the stark choice of raising tax rates, increasing government borrowing or abandoning his spending plans unless he proves his critics wrong and the economy comes out its slowdown quicker than many believe is likely.
The chancellor's "optimistic" growth estimate for 2004 risks undermining the credibility of his department, the committee said.
They recognised that the chancellor's April 9 Budget took place during the war in Iraq and were made against the backdrop of uncertainty.
However, rather than erring on the side of caution the forecasts for 2004 were found to be "notably more optimistic than those of a wide range of other forecasting bodies", the report found.
"It is important to maintain the credibility of the economic assessment underpinning Treasury forecasts for the public finances," the MPs concluded.
Robert Chote of the Institute for Fiscal Studies had told the committee that the chancellor's "forecast for growth for the year ahead is further away...from prevailing perceived wisdom than it has been on any previous occasion".
Urging the department to explain its thinking more clearly, the committee pressed the Treasury to publish its own technical studies to explain the basis of its forecasts.
Brown should also consider reviewing his forecasting methods, the report suggested.
A Treasury spokesman said the methodology was robust and that the department stood by its work.
"The Treasury's forecasts are central forecasts based on a rigorous assessment of prospects and risks," he said.
Strong economic fundamentals mean that the UK is well-placed to respond positively as the global recovery gathers pace."
But Liberal Democrat MP Norman Lamb, a committee member, said the Treasury should open itself up to scrutiny.
"There is an overwhelming case for an independent review of Treasury forecasting," he said.
"The chancellor's latest Budget was greeted with widespread scepticism, especially the forecasting methods.
"A technical review of forecasting procedures, such as undertaken within the Bank of England, would give Treasury forecasts greater credibility.
"But only continuous and vigorous assessment by the National Audit Office will fully restore the Treasury's reputation."
Dods Parliamentary Communications Ltd