The Office for National Statistics reported on Thursday that borrowing was £19.9bn in May, which is an increase of £7.7bn over the same month in 2008. This equates to an annualised rate of about 13% of GDP.

Government receipts are 11% lower than last year while spending has increased by 7.4% - both largely due to the recession and banking crisis.

Receipts from taxes on income and profits have fallen more sharply than anticipated and a report from PwC UK has suggested that spending needs to be cut twice as fast as the five year timetable suggested by the government to bring public sector borrowing back under control. That would mean a cut in real terms of about 11% per annum for three years across all government departments.