A survey of City economists in the FT finds that they expect the chancellor to announce only around £1.5bn of tax cuts in this week's Budget.

Gordon Brown is widely expected to raise the threshold at which stamp duty is paid in a bid to help first time buyers, but will draw back from trying to match other Tory tax moves.

Instead he is set to use any spare cash to increase investment in science, skills and families, drawing clear dividing lines between Labour and the Conservatives.

The chancellor is also expected to use high global oil prices to justify freezing excise duties on petrol.

Yesterday Brown's former chief adviser Ed Balls said the Budget should be used to set out "long term choices".

"I don't think people will be looking for pre-election giveaways, a short term Budget," he said.

Almost all the economists surveyed also believed Labour will need to raise taxes in a third term in order to meet spending commitments.

The Telegraph claims that Brown has persuaded government departments to push projects that should have begun this financial year into the next so he does not breach his own rules on borrowing ahead of the general election.

Meanwhile, the CBI is pressing the chancellor to make his Budget a "boring" one that avoids election bribes.

Director general Sir Digby Jones said Britain had "the most successful economy in the developed world" which should not be put at risk.