Even Darling thinks his Budget doesn't add up as relations with  Brown hit all-time low

A bitter row over the contents of the Budget has left relations between Gordon Brown and Alistair Darling at an all-time low.

Treasury sources say the Chancellor wanted the Budget to include aggressive cuts in public spending to tackle the nation’s deficit – the biggest since the Second World War.

However, they claim he was firmly overruled by the Prime Minister, who feared the move would lead to disaster at the next Election.

Darling's budget leaves a black hole costing £2,800 per family per year for 10 years

Burden: The Chancellor wanted the Budget to include aggressive cuts in public spending to tackle the nation’s deficit

Amid growing recriminations within Whitehall, sources said that Mr Darling had wanted a ‘much more prudent’ set of measures than Mr Brown would allow.

The Chancellor argued that without swift action to slash spending, the UK could suffer a crash in its international credit rating and risk entering a downward economic spiral.

But after fierce resistance from Downing Street, Mr Darling announced just £9billion in cuts, which is less than half the amount advisers say is necessary to arrest a shocking deficit of £175billion.

One Darling ally said: ‘Alistair wanted to bear down on spending so that we would come out of recession at the earliest opportunity.

‘He wanted to do the right thing, not the most politically expedient thing. No10 did not seem to have the same sense of priorities.’

The Chancellor has been heavily criticised for presenting an unduly optimistic economic picture in his statement.

Just two days after he declared that the economy had contracted by 1.6 per cent in the first three months of the year, official figures revealed that it had actually dropped by 1.9 per cent – a difference that could add another £10billion to the deficit by the end of the year.

Gordon feels the pressure, lost in thought yesterday...

Strained: Brown feared cuts would lead to disaster at the next Election

The row between the two most senior figures in the Government follows what supporters of Mr Darling believe is a ‘campaign to destabilise’ the Chancellor by members of Mr Brown’s inner circle.

It is claimed that Downing Street supporters of Schools Secretary Ed Balls, who has always coveted the job of Chancellor, have briefed against Mr Darling in an effort to get him into the Treasury as part of a pre-Election reshuffle.

The Darling ally added: ‘Certain people around Gordon Brown have been bad-mouthing Alistair. They want to undermine him so that he is replaced by Balls. Alistair knows what is going on.’

Mr Darling’s supporters are confident that the Prime Minister would not risk changing his Chancellor in the middle of what has been billed as an economic recovery programme.

But other Cabinet changes are expected shortly after the local and European election results on June 4, which are likely to make bleak reading for the Government.

Home Secretary Jacqui Smith looks most vulnerable, following the furore over her expenses claims and a hardening of the mood against her in Downing Street.

‘There is no sympathy for her and she hasn’t helped herself with her recent Commons performances,’ one Minister said. ‘She may just fall on her sword, or Gordon might humiliate her with a demotion to something like the Department for International Development.

‘It would be his Election Cabinet, so he would have to get it right. I think there will be a lot of Ministers who will want to go, people who are either standing down at the next Election or need to put more time into their seat, so he might have quite a lot of room for manoeuvre.’

One eye-catching change being mooted is the appointment of Peter Mandelson as Foreign Secretary – a job he has always coveted – in place of David Miliband, who is said not to be enjoying the brief. Mr Miliband could then be moved to the Home Office in place of Ms Smith.

A spokeswoman for Mr Darling said yesterday: ‘Alistair and Gordon were in complete agreement. They were both on the same page on the day of the Budget.

‘I have never heard him complain about the attitude of the people around the Prime Minister towards him.’

However, onlookers have described some of the private language now being used about the Chancellor by members of the Downing Street clique as ‘abusive and unfair’.

Mr Darling’s appointment as Chancellor in June 2007 – the day after Mr Brown entered Downing Street – was widely interpreted as a sign that the new Prime Minister still intended to keep tight hold of the Treasury reins.

Mild-mannered Mr Darling was seen as a colourless but competent Minister who would avoid controversy – especially welcome after the fraught relationship between Tony Blair and Mr Brown.

But problems between the two men soon began to appear after it became apparent that Mr Darling would not stick to a ‘teacher/pupil’ script.

The tension grew as the economy slowed down and the new Chancellor was forced to query some of his predecessor’s decisions.

Last summer, he upset No10 with an extraordinary – but in retrospect accurate – prediction that the ‘economic times we are facing ... are arguably the worst they’ve been in 60 years’.

Then last month, Mr Darling again infuriated allies of Mr Brown by appearing to bow to Tory demands for an apology over the state of the British economy.

He conceded that the Government shared responsibility for allowing a culture of risk-taking in banks to get out of control.

‘All of us have to have the humility to accept that over the last few years things got out of alignment,’ he said.

But on a trip to the US soon afterwards, the Prime Minister struck a very different tone and offered no apology – fuelling talk of a rift.