THE British Prime Minister, Mr Major, yesterday promised to fight - and win - the next election on the basis of a booming economy. Setting the tone for the forthcoming election campaign, Mr Major said Britain faced a watershed year in 1997.

He said the public "can choose a future where prices and mortgage rates are firmly under control". Mr Major made his remarks in a new year message to the chairmen of local Conservative party associations.

"They can choose a future that looks rosy, with the best economic, conditions this country has seen for a century and they cap choose a future where British interests will be fought for in Europe," he said.

"Or they can risk a future with an untried, unrealistic alternative. We will win that election, because on all three counts it is too risky to trust Labour with Britain's future," he said.

Mr Major also made five pledges to voters. He promised to cut the basic rate of tax from 23 per cent to 20 per cent, to keep inflation firmly under control, to ensure house loans remain affordable, to create new jobs and to fight against moves towards a more federal Europe.

Labour immediately dismissed Mr Major's promises. "It is a desperate last ditch effort to win back support before the election," said Labour's deputy leader, Mr John Prescott.

The Labour leader, Mr Tony Blair, unveiled five pledges three months ago at the party's last annual conference before the election.

Mr Blair promised to cut primary school class sizes, to get 250,000 unemployed youths into work, to cut hospital waiting lists, to take a tough line on persistent young offenders and to keep both government spending and inflation down.

Mr Blair is expected to call for an early election in his new year message, due to be given today.

Mr Major said Labour was making unachievable promises. "They have made £30 billion worth of spending pledges," he said. "The real danger lies in the fact that Labour won't say where the money is coming from," he added.