Chancellor Alistair Darling is expected to unveil plans that will see top earners pay a higher rate of income tax in the Pre-Budget Report.

He is expected to announce the plan for a 45% top rate on people earning at least £150,000 a year as he sets out how he will claw back a multi-billion boost to the troubled economy.

However, the new tax band would not be introduced until after the next general election, which must be called by May 2010.

It is thought to be among a series of deferred tax increases designed to bring down borrowing incurred now to fight the recession.

The Pre-Budget Report is expected to see VAT slashed from 17.5% to 15% as part of a £15 to £20 billion bid to encourage spending.

It would send borrowing soaring above £100 billion, leading to Conservative accusations that Labour is storing up a "tax bombshell".

The Treasury refused to comment on the apparent leak of the 45% tax rate, describing it as "speculation".

But ministers repeatedly stressed that Mr Darling would set out in his report how he intended to get the public finances on a more stable footing later on.

In a speech to the CBI's annual conference, Prime Minister Gordon Brown will say: "To act now means we have also a duty to set out what we will do later."

A new top rate of tax would create a widening divide between Labour and the Tories on fiscal policy.

Conservative leader David Cameron has announced he will no longer match Government spending plans from 2010/11 and is against the unfunded spending increases.

The deferral of any increases in income tax until after the next election will mean that they will not be introduced unless they are endorsed by voters.

The strategy will only fuel speculation that Labour is plotting a course to a fourth consecutive election victory.

Robert Chote, director of the Institute of Fiscal Studies, said the tax would be paid by about 400,000 people and would raise an enormous amount of revenue.

Copyright © Press Association 2008