Gordon Brown is said to be resisting calls for a blanket freeze on petrol duty despite a sharp rise in oil prices.

The chancellor is looking at options to encourage the use of "green" fuels.

After the government's ditching of the fuel duty escalator, city analysts expect an increase in line with inflation.

Risking a confrontation with Tony Blair, Brown is also set to block the abolition of student loans and the restoration of the maintenance grant for higher education.