PM plays down reports of King rift

Mervyn King warned on Tuesday that the parlous state of the public finances meant the Government could not afford a fresh "fiscal stimulus" package in next month's Budget.

However, speaking in New York, the Prime Minister insisted that the Governor backed measures to support the economy.

"What the issue is actually now is whether we are prepared, given what happens over the next few months, to do what is necessary to resume growth in the economy," he said during a question and answer session at an event organised by the Wall Street Journal.

"I think, if you put that question to Mervyn King, he will say - as he said when he signed the G20 communique - that we have got to be ready to take action that is ready to restore growth."

Mr Brown emphasised that the economy was being supported through interest rate cuts and pumping in additional money - so-called "quantitative easing" - as well as the original £20 billion fiscal stimulus package last November. "If you take these three changes that have happened over the last few months together, that is where you will look for results in the combination of these three," he said.

The Prime Minister is currently on a whirlwind international tour to rally support for further concerted action to tackle the global downturn at the G20 summit in London next week.

Earlier, Downing Street rejected reports of a split between Mr Brown and Chancellor Alistair Darling over the need for a further fiscal stimulus of tax cuts and spending increases.

Separately, Mr Brown said that the process of globalisation was forcing countries to be clearer about what they were as nations in order to provide a sense of rootedness and community in a fast-changing world. And he warned that, without a strong national identity, the danger was that people defined themselves by race or ethnicity.

In an interview for a BBC Radio 4 documentary on Britishness by the editor of The Spectator Matthew d'Ancona, the Prime Minister said it was important to view British history in terms of the growth of ideas like tolerance, liberty, fairness and justice as well as through the stories of individual people and institutions.