Steel tycoon pledges to bankroll Brown in snap poll

Steel tycoon Lord Paul said he would bankroll Labour with "as much as I can afford" if the Prime Minister went to the country early - possibly as soon as this autumn.

The declaration fuelled election fever as it effectively removed the biggest barrier to a poll.

Labour has debts of more than £20 million and willing supporters have dwindled in the wake of the cash-for-peerages scandal. By contrast the Conservatives have a surplus of £4.2 million.

But Lord Paul, who has an estimated fortune of £280 million, made clear he could sign Mr Brown a blank cheque to take on David Cameron.

Asked how much he would donate, Lord Paul said "As much as I can afford".

Lord Paul claimed he had not been approached about funding a poll but told Channel 4 News: "All I know is that if there is an election and the money is wanted, whatever I can pay I will pay.

"I am a believer in [Gordon Brown] and his leadership, and I think he's the best person in the country."

The peer funded the Prime Minister's leadership campaign to the tune of £45,000 through his company Caparo Industries.

It came as new figures revealed Mr Brown's chances of winning a snap election have been boosted by a massive £39 billion spending spree on public services.

The Prime Minister has released the public purse strings to pledge cash for railways, childcare, housing, the Armed Forces and flood defences.

The series of eye-catching spending announcements appear to have contributed to Labour's strong lead in the opinion polls since Mr Brown entered Downing Street.

But the Tories claimed much of the cash had already been announced and had pre-empted Parliament by unveiling them before the Comprehensive Spending Review this autumn.

Chancellor Alistair Darling will not increase overall spending, but the early release of cash from the spending review includes an extra £7 billion for defence, £15 billion more for railways, £8 billion more for housing and £4 billion extra for Sure Start pre-school centres.

Shadow Treasury Chief Secretary Philip Hammond said: "Gordon Brown has shamelessly ignored Parliamentary procedure in a bid to shore up his position as Prime Minister.

"These spending decisions should be announced as part of the Comprehensive Spending Review in the autumn.

"Yet from the moment he took office, Gordon Brown has been putting out a stream of press releases announcing these funds as new money - and when we check the small print, it's clear this is money included within public spending totals already agreed.

"This is more evidence that the culture of spin is alive and well in the Brown Government."

Andrew Haldenby, director the independent think tank Reform, said: 'Tony Blair's decade in office demonstrated that reform, rather than higher public spending alone, is the route to higher quality public services.

"Gordon Brown's first decisions amount to a retreat from reform in the key areas of health, education and welfare.

"They have put upwards pressure on taxation at a time when UK taxes are already rising to a 25 year-high."

A report cast doubt on Mr Brown's housebuilding programme by claiming that millions of homes earmarked for construction would have to be built on greenbelt land.

The Social Market Foundation think tank said 2 million out of the 3 million new properties pledged by 2020 would be on undeveloped countryside or the greenbelt around major towns and cities.

The study said that even if the new homes were built on a density equivalent to London, only 2.1 million new homes could be built on brownfield land - and that would mean paving over parks and gardens.

The report said that on a more realistic housing density, "almost two million homes would need to be built on non-previously developed land".