British Chancellor Mr Gordon Brown signalled a huge spending package yesterday, in an effort to end a black period for a government which only months ago was tipped to hold power for a generation.

Mr Brown unveiled hefty budget increases totalling £43 billion sterling (€69 billion) over three years. The figures include almost £1 billion extra for Northern Ireland. But treading the tightrope all finance ministers must, Mr Brown reassured the financial markets that nothing would come before economic stability. Hard work to reduce unemployment and debt interest payments allowed the spending splurge, he said.

"Our choice is stability, employment and sustained longterm investment, now and into the next parliament," Mr Brown said.

Mr Brown's Conservative opposite number, Mr Michael Portillo, was happy to take up the tax-cutting mantle, traditionally the key to electoral success.

"We will fight the next election as the low tax party. Labour has been exposed as the high tax party," he said.

Mr Brown announced increases in education spending of 6.6 per cent a year over the rate of inflation for the next four years, above even the billions of pounds he found for the cashstrapped health service in his March budget.

Substantial spending plans were also unveiled for crimefighting, defence and transport, further details of which will be announced later. But the public has become sceptical about big-money announcements since Mr Brown, two years ago, artificially inflated a figure for the amount of money being pumped into schools and hospitals by triple-counting.

"When people trust this government so little, who knows what we will find in the small print," Mr Portillo said. Labour's future depends now on delivery, not spending pledges. Mr Brown detailed tough targets - on literacy and numeracy, child poverty and health care, which will go hand-in-hand with the extra money. Mr Portillo said the government was failing to provide what the public needed to be convinced - concrete improvements on the ground after three years on power. "How can this government spend so much and spend it so badly?" he asked.

The North's Executive will receive almost £1 billion extra to spend over the next three years as a result of the British government's spending review. It will be free to decide its own priorities for the new money.

The Executive's budget will increase from this year's levels by £361 million in 2001-2, by £667 million in 2002-3. In addition, extra unspecified spending has been provided over the next three years to the Northern Ireland Office to meet the British government's commitment to implementing the Belfast Agreement reforms.

The additional money was welcomed by the SDLP Finance Minister, Mr Mark Durkan, who expected all the new ministers to be making strong cases for their own departments.

The North's First Minister, Mr David Trimble, said: "The substantial increases in spending plans will provide a good basis for the development of our public services. "

His deputy, Mr Seamus Mallon, said: "This new money will be used to meet the priorities that this administration identifies. We will not necessarily follow the pattern of allocations announced today for England.

"With devolved government we now have the responsibility and opportunity to address local needs for the distribution of this money and we will need to look carefully at how best to use this allocation," he said.

The Northern Secretary, Mr Peter Mandelson, said the extra money gives the Northern Ireland devolved administration the resources to deliver improved services and prosperity for all the people of Northern Ireland.

"I expect the Northern Ireland administration will make its own announcements in due course about its detailed spending plans. The extra funds for the Northern Ireland Office also show our commitment to providing modern, effective and accountable public services which meet the needs of the whole community in Northern Ireland.