The Tories accused Tony Blair of telling "lies" as a bitter row erupted over Labour's claim that a Conservative sovernment would cut public spending by £35bn.
The dispute between the two main parties looks certain to dominate the general election campaign after ministers tried to revive the spectre of "Tory cuts". The Tories insisted they would match Labour's spending on schools and the NHS and would spend slightly more than Labour on police, pensions and defence.
Labour tried to use the momentum from Gordon Brown's Budget to turn the spotlight on the Tory public spending strategy yesterday. But its attack appeared to misfire when the Tories accused ministers of issuing "fantasy figures" and a "smear and fear" campaign.
The Tories admit that if they win power, public spending - at £663.5bn - would be £35bn lower by the 2011-12 financial year than under Labour's plans. They insist their plan to trim the growth in spending planned by Labour does not amount to the swingeing cuts claimed by Labour.
But Labour believes it has found the Tories' weak point and Mr Blair will drive home its attack today. He will tell the Welsh Labour conference in Swansea that Labour will battle for higher investment in schools and hospitals. "It is a fight for the future of Britain, a fight we must win," he will say.
He will say the Tory programme shows the party has "not changed at all" and, unlike Labour during its years in the electoral wilderness, has failed to face up to the fundamental changes in the country.
Peter Hain, the Secretary of State for Wales, will issue a stark warning to disaffected Labour supporters not to take risks with their mortgage, savings, pension, family's health, child's education , safety and security by allowing the Tories a "backdoor" victory by backing another party or staying at home.
His conference speech will be a deliberate echo of Neil Kinnock's controversial warning at the 1983 election for people "not to be young, fall ill or grow old" under a Tory government.
Mr Blair became irritated after unveiling a poster saying, "Warning. The Tories will cut £35bn from public services". Asked how money could be "cut" before it was spent, he told journalists: "You're questioning me on whether they've got a plan to spend £35bn less; that's what they have said, go and ask them how they're going to spend £35bn less and not take that money from frontline public services. Then we'll have the debate."
Ministers said the Tory cuts were the equivalent of sacking every GP, nurse and teacher in Britain, claiming they totalled £50bn when other spending commitments by opposition frontbenchers were included.
Liam Fox, the Tories' co-chairman, accused Mr Blair of lying to the country. He said: "Every time people hear '£35bn', they will look at Tony Blair and think of his record in government. The public already think that Tony Blair is not to be trusted, that he is all talk, that he has broken his promises. It is another Labour lie. He is simply going to reinforce this idea amongst the public that he cannot be trusted."
Mr Howard said: "The truth is, we plan to increase spending at 4 per cent a year, Labour plans to increase spending at 5 per cent a year, so they plan to increase spending by a penny in the pound more than we do. The only thing we are going to cut is waste."
THE WAR OF WORDS
The Tory plan to spend £35bn less than Labour by 2011-12 would mean cuts in frontline services such as health and education
The Tories would find savings in "non-priority" areas while matching Labour on schools and NHS and spending slightly more than it on police, pensions and defence
The Tories have "double counted" £22bn of savings from a Treasury crackdown on government "waste"
Wrong. The Tories have found total of £35bn of efficiency savings, including the Treasury proposals
The Tories could not deliver on their pledge to cut taxes by £4bn in their first Budget
The Tories would use efficiency savings to reduce borrowing by £8bn and taxes by £4bn
Labour would be forced to raise taxes in a third term to fill a £10bn "black hole" in its spending plans
There is no "black hole". Critics of Gordon Brown's forecasts are usually proved wrong
The Tories would halve council tax bills of all pensioners, and still give them Labour's new £200 rebate
800,000 pensioners would miss out on the Tory rebate because it will not be given if one person in the household is under 65
Pensioners would be worse off under Labour in a year's time because its council tax rebate is a one-off
Wrong. The decision on council tax rebates is taken annually. The council tax system is also under review
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