Labour would need to raise taxes or cut spending by £11bn in the next parliament, the Institute for Fiscal Studies warned yesterday.

Gordon Brown insisted that the analysis was far too pessimistic and pointed out that his forecasting record was better than international groups such as the Organisation for Economic Cooperation and Development and the International Monetary Fund.

The chancellor told the Guardian: "People said Britain would suffer a recession. We proved them wrong. People say we won't meet our fiscal rules. Once again, with the public finances strong, we will prove them wrong."

The Conservatives welcomed the IFS report, with shadow chancellor Oliver Letwin saying: "This is yet more proof of what almost all independent experts now agree - that Mr Blair has a gaping hole in his finances which he will have to fill with higher taxes if he wins the election."

But the IFS also said that public spending and taxation would be higher at the end of the next parliament than it is now, no matter who emerges victorious on May 5.

It also cast doubt on the Tory claim that a Conservative administration could cut costs by £35bn.

The Tory plans, it said, assumed that they would be "able to cut spending as quickly and painlessly as they claim. Past experience suggests caution."

If the Conservatives were unable to find their projected savings, they would face the choice of "spending and borrowing more than they intend or making other, potentially more painful, spending cuts to fill the gap".