Finances in an utter mess - Cameron

To huge cheers from Tory benches, he said any claim the Labour Government had made to economic competence was now "dead, over, finished".

Mr Cameron said: "Today everyone can see what an utter mess this Labour Government and this Labour Prime Minister have made of the British economy."

He added: "The fastest rise in unemployment in our history, the worst recession since World War Two and the worst peacetime public finances ever known.

"As of today, any claim they have ever made to economic competence is dead, over, finished."

Mr Cameron said the £348 billion Mr Darling planned to borrow over the next two years was more than had been borrowed by every government put together "since the Bank of England was first founded more than 300 years ago".

He said: "This Prime Minister has certainly got himself in the history books - he has written a whole chapter in red ink - Labour's decade of debt."

Liberal Democrat Treasury spokesman Vince Cable said the Budget would do little to boost Labour's election chances and said the Government appeared to be "throwing in the sponge".

He said: "It is a bit of a resignation in a way. They are throwing in the sponge, admitting there is not much they can do about these problems and passing it on."

Mr Cable said the 50% tax rate on high earners was "tokenistic", as the wealthy would use loopholes to avoid it, and more should have been done for low-income workers. And he described Mr Darling's predictions for a return to growth as "wildly optimistic" and out of line with the forecasts of independent economists.