Credit crunch could hit Tories' tax cuts

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Just 24 hours after raising the spectre that the Tories could be forced to raise taxes, Mr Cameron admitted that Treasury coffers may be so empty in two years that he could face "very difficult decisions about public spending" if his party wins the next election.

His comments, in an interview in the Guardian, are likely to disappoint Rightwingers calling for upfront tax cuts.

In a further sign early tax cuts may be slipping down the agenda, MrCameron said: "We will face a very difficult situation due to the high level of borrowing ... if unemployment rises, an incoming Conservative government will face very difficult decisions about public spending."

Mr Cameron has vowed to protect investment in health and education but MPs are likely to see his warning as a signal that cuts could be made in other areas - such as defence, transport and at the Home Office - to finance a rising bill for unemployment benefits. The Conservatives have blamed Gordon Brown for exacerbating Britain's growing economic difficulties, accusing the Prime Minister of failing to "fix the roof while the sun was shining".

The Tory leader also plunged into the controversy surrounding US presidential candidate Barack Obama by backing his warning that too many black fathers are neglecting their duties to their children.

Mr Cameron said black church leaders had expressed similar concerns to him. Calling for a "responsibility revolution" to change behaviour, he said: "I think he's absolutely right ... and it will have a huge influence that he has said it."

Mr Cameron also compared his party's transformation under his leadership to a game of Tomb Raider.

The first stage was to show that "you are a reasonable, decent, nondiscriminating, sensible, practical person who understands the world". Having passed this level, the Tories could "talk about some of the difficult issues".