UK public finances last month posted their biggest cash surplus for an October since 1999, providing a welcome boost for Chancellor of the Exchequer Gordon Brown less than three weeks before his pre-budget report.

October is traditionally a strong month for corporate tax receipts but official data yesterday showed both key measures of the government's books improved more sharply than expected.

The public sector posted a net cash repayment of £8.422 billion, well above forecast and nearly four billion pounds more than in October last year.

Around £2 billion of the surplus came from British Nuclear Fuels Ltd's (BNFL) sale of its Westinghouse subsidiary but overall tax receipts were also up sharply, helped by recent changes to the timing of payments by North Sea oil companies.

The government's preferred accruals-based measure also swung into the black for the month, posting a larger than expected surplus of £1.623 billion.

Nevertheless, Brown still faces a battle to meet his target of reducing net borrowing to £36 billion this year from nearly £39 billion in the fiscal year to March 2006.

Cumulative net borrowing for the first seven months of this financial year stood at nearly £23 billion, more than £2 billion higher than at the same time last year.

Mr Brown will deliver his pre-budget report on December 6.