British Finance Minister Gordon Brown will set the stage for a May general election in his budget today, putting himself and the economy at the centre of Labour's bid for an unprecedented third term.

With six weeks left before the expected polling day, Mr Brown will seek to put new vigour into a campaign which politicians from all sides say is being led by the opposition Conservatives.

Treasury officials have ruled out a pre-election spending spree but soaring company tax receipts have given Mr Brown some room to offer some small vote-winning concessions even though experts say taxes will have to rise after the election.

"We expect a modest giveaway of around £1-2 billion," said Philip Shaw, chief economist at Investec.

"Further ahead though, we feel ahead that tax increases are likely to meet the fiscal rules in the next economic cycle."

Mr Brown will remind voters of the prosperity they have enjoyed under his stewardship of the economy and say that Britain must now focus on boosting science, enterprise and skills to meet the challenge of countries like China and India.

The economy remains Labour's trump card for an election which polls predict it will win, although party strategists worry about a much reduced-majority because of Prime Minister Tony Blair's unpopular Iraq war stance.

Mr Brown has been under fire in recent years from experts like the International Monetary Fund who say that his forecasts for tax revenues are too optimistic and that spending needs to brought under control.

So far, he has proven them wrong and the 54-year-old veteran Labour politician remains on course to meet his "golden rule" on the public finances - that a government only borrows to invest over the economic cycle. But admitting they have been wrong until now, his critics argue that the public finances have deteriorated sharply over the last few years and that a "black hole" of several billion pounds will have to be dealt with whoever wins the election.

The Conservatives, however, have pledged to cut taxes by £4 billion, claiming that is what the election battle is about - cutting needless government spending on bureaucracy.

"That is what, as I see it, the election is going to be fought about - tax and spend - because there is nothing between us otherwise," Conservative shadow finance minister Oliver Letwin said last week.

"If he "Brown" is spending 12 billion more, I can still afford to use eight billion of that to plug his black hole and I could use four billion of that to reduce taxes after the election."

But Mr Brown will accuse the Conservatives of threatening vital public services by their promise to cut £35 billion of spending.

While Mr Brown will use his ninth annual budget to focus on the longer term problems faced by the British economy, expectations are growing that Mr Brown will raise the threshold at which stamp duty on home-buying is paid. He is also under pressure to raise inheritance tax thresholds as more and more have been caught in its net given the rapid rise in house prices, though this seems unlikely as Mr Brown tends to focus his largesse on lower-income groups.

While the fiscal arithmetic is unlikely to change so much that financial markets will in any way be worried, political pundits will be hanging on Mr Brown's every word.