Brown 'bombing Britain to brink of bankruptcy'

The Tory leader branded Labour "corrupted by power" and attacked the Prime Minister for returning to Seventies-style economic policies.

Mr Cameron said in his New Year message: "It's no surprise that a Prime Minister whose decisions over a decade helped cause the debt crisis, who failed to prepare the country for the gathering storm, and whose irresponsible extra borrowing will now deepen and lengthen the recession, turns round and tells us the recession will be a test of everyone else's character.

"The Prime Minister tells us to find our Blitz spirit when he is the one dropping the bombs - the tax and debt bombshells that are taking Britain to the brink of bankruptcy."

Mr Cameron pledged lower taxes under a Tory government while unveiling plans to build a "new economy and new society". With strong echoes of US president-elect Barack Obama, he promised "change, optimism and hope".

The Tory leader's attack on Mr Brown came days after Church of England bishops condemned the Government's policies.

Mr Cameron lambasted the Prime Minister for a big increase in borrowing that aimed to lessen the impact of the downturn. "This government has lost its moral compass," he said.

"Where is the morality in asking our children to pay off our debts? Where is the morality in encouraging people who have already borrowed too much to borrow a little more? Where is the morality in trying to reflate the bubble and return the country to the age of irresponsibility that led us to this mess?"

He accused Mr Brown of burying New Labour with a "return to Seventies-style subsidy and state control", criticised the temporary cut in VAT and urged the Prime Minister to back his party's National Loan Guarantee Scheme.

Labour had branded the Tories the "do nothing" party after Mr Cameron and shadow chancellor George Osborne refused to back spiralling borrowing.

But the Tory leader said: "For us, the strong economy of the future will be built on a strong and responsible society. The Emperor Hadrian, when asked how Rome would be rebuilt after a devastating fire, replied: 'Brick by brick, my citizens; brick by brick.' That is how we will rebuild our broken economy and our broken society - business by business, family by family, community by community."

Stressing that his party was now ready for a general election, he promised a stronger society "where lower taxes, a less interfering, bureaucratic state and green growth combine to produce a sustainable economy".

Culture Secretary Andy Burnham hit back saying: "Families and businesses need action and real help now, not overblown rhetoric. Instead of a message of hope and optimism all we get from the Tories is more over-hyped cynicism."

He said the Government had "given" a £145 tax cut to 22 million basic rate taxpayers and claimed the VAT cut was worth £275 a year to the average household.

Lib-Dem leader Nick Clegg warned in his New Year message: "Every day, 200 families are now at risk of losing their homes and three million people could be out of a job."