Public services were again the clash issue

At prime minister's questions, Mr Howard said Tony Blair had been "rumbled" by figures in last week's pre-Budget report.

Mr Blair instead insisted the share of government spending on bureaucracy had fallen since Labour came to power.

And spending in the NHS had risen from £30 to £80 for every family.

Tax offensive

The questions session saw the prime minister and his Tory counterpart trading a mass of figures.

Mr Howard said Britain's most senior civil servant, the cabinet secretary, had said bureaucracy and paperwork was out of control because of the government's target culture.

Since Labour came to power in 1997, the costs of administering central government had risen by £7bn.

And last week's pre-Budget report revealed that public sector investment - on areas like education, health and transport - had almost halved.

Mr Howard continued: "Doesn't this prove that this is a government that is taxing and spending and failing?

"That people are faced with ever higher taxes and ever failing services and that after six-and-a-half years this is a prime minister who's lost his grip and a government that's lost its way."

'Daily cash boost'

Mr Howard also accused the prime minister of repeatedly failing to answer his questions.

He quipped: "I'll make the prime minister an offer. If he wants me to answer the questions, let him give me a slot every week for leader of the opposition's questions."

Mr Blair insisted public spending had gone up "day in, day out" since 1997, pointing to 55,000 extra nurses and 25,000 extra teachers.

"The NHS today as a result of that extra investment is in a better position that it ever was when he was in power," he said.

"We know why the Conservatives want to run down the National Health Service - because they want to get rid of the National Health Service."

He turned his fire on Mr Howard's own record in power, saying the Tory leader had to apologise for cutting police numbers and for the poll tax.

Fee plans

For his questions, Liberal Democrat leader Charles Kennedy brought up the controversy over the government's plans for university top up fees.

The proposals would mean a graduate earning £15,000 paying an effective tax rate of 42% and those earning £35,000 a rate of 50%, he said.

But Mr Blair again ridiculed the Lib Dem's own plans, saying they were trying to finance a string of unaffordable proposals through raising the tax rate for top earners to 50%.