Gordon Brown has dismissed critics of his economic growth plans and promised to make Britain the most competitive country in the world.

Speaking at a Treasury conference on "advancing enterprise" on Friday, the chancellor said he was on track to meet his own fiscal rules, despite expert opinion suggesting otherwise.

The summit was being held ahead of Saturday's meeting of G7 finance ministers, with US Federal Reserve chairman Alan Greenspan, education secretary Ruth Kelly, industry secretary Patricia Hewitt, CBI chief Sir Digby Jones and Brendan Barber of the TUC all in attendance.

Brown opened proceedings by saying that Britain will only thrive in the future global economy by building a cross-party consensus on ensuring economic stability and investing in science.

But responding directly for the first time to reports such as that from the Institute of Fiscal Studies last week which claimed there is an £11 billion "black hole" in his spending plans, the chancellor insisted that he would fulfil his commitment to balancing the budget across the economic cycle when he delivers his forthcoming Budget.

He also slammed pessimists who say the boom years under the Labour government have been fuelled by cheap consumer credit and rising house prices, claiming the UK is in a much healthier position than competitors.

"To those who question whether Britain's seven high growth years must inevitably be followed by lean years, let me answer directly: our new monetary and fiscal framework, this British model we have created - strategic decisions we took to make the Bank of England independent, impose a symmetrical inflation target, cut the national debt and entrench long term fiscal rules - will continue to make us well placed to cope with the ups and downs of the economic cycle," he said.

"In the last seven and a half years inflation - once more volatile than almost any other industrial nation - has been consistently nearest to target and the least volatile of any country. Of the major industrialised economies, only Britain, once the stop-go economy of the industrialised world, has maintained growth free of recession in every quarter.

"And we not repeat the mistakes of the past and will do nothing to put at risk our new won and hard won stability. Any government in which I am chancellor will complement monetary vigilance with fiscal discipline.

"Let me tell you where we stand today. Debt has risen to 44 per cent of national income in America, 46 per cent in France, 55 per cent in Germany, and 84 per cent in Japan. But in the UK debt is just 35 per cent. The deficit in France is 3.7 per cent of national income, in Germany it is 3.9 per cent, in America 4.4 per cent, in Japan 6.5 per cent.

"Our deficit is just under three per cent falling to two per cent. Ten years ago the deficit in Britain was the equivalent in today's money of £90 billion, today it is just a third of that - and we will meet our fiscal rules."

Incentives

Brown also promised "far-reaching new incentives" to make Britain the most business-friendly country in the world.

"To win this prize, we are prepared to remove any unacceptable barrier, legislate any necessary reforms and introduce far-reaching new incentives," he said. "This is not rhetoric - it is our considered and determined view."

Stressing the need to invest in new technologies and research, the chancellor said "Britain will only attain a new and competitive place for ourselves if we strive for, and win, world leadership in science and skills and enterprise."

"Measures I will announce in the Budget will reinforce our determination that our incentives to attract research and development are the world's best, our universities are world class, and we should aim to lead the world in strengthening the links between higher education and the hi-tech firms of the future," he said.

"I can tell you that more than ever our investment effort, both for inward and indigenous investment, will focus on encouraging and stimulating creative firms that are high value added, research based, and technology led.

"We will continue to welcome qualified people with skills from other nations to study in and contribute to Britain.

"And I want Britain to lead the world in resolving the controversial issues of genetic research, animal experimentation and GM foods - so we can value and celebrate science and the joy and excitement of scientific discovery."