THE centrepiece of Gordon Brown’s final budget in 10 days’ time will be an even tougher clampdown on public spending than previously signalled.

The chancellor has demanded big cost savings across Whitehall to try to reestablish his reputation for prudence.

His hair-shirt approach is also aimed at wrongfooting the Tories, who have pledged to share the proceeds of growth between public spending and tax cuts. Brown will challenge the opposition to reduce spending below his plans.

He will say in his budget on March 21 that public spending over the next three years will grow by less than the 2% annual increases government departments had expected.

Senior Treasury officials said “hard-nosed discussions” with spending departments meant Brown would be able to present figures showing a bigger tightening than envisaged three months ago in his prebudget report.

Then Brown said public spending would grow by 2% a year on top of inflation, against recent increases of between 4% and 5%. The new spending “envelope” for 2008 to 2011, to be fleshed out in this summer’s comprehensive spending review, will probably be about 1.75%.

Experts say the squeeze will make it hard for the government to meet its commitments.

“Our view was that even if you were very tough on everything else, with 2% it was hard to see how the government could meet its targets,” said Robert Chote, director of the independent Institute for Fiscal Studies. “This leaves you with a trade-off between health and education. One is going to be squeezed.”

The clampdown will mean that public spending in 2011 will be £12-13 billion lower than if it were to rise in line with the economy. Brown will achieve the slower growth by hitting some departments hard — John Reid, the home secretary, has agreed that his department’s budget will be frozen in real terms.

The tightening will be felt by public sector workers. Earlier this month Brown announced a below-inflation 1.9% pay rise for public sector employees, with GPs’ pay frozen. The pay squeeze will continue in the coming years.

Since 1998 Brown has increased the number of public employees by nearly 700,000 to 5.85m. The trend is now likely to go into reverse.

Chote agreed that Brown’s tactic could make life tougher for the Tories. “It makes it more difficult for the Conservatives to say they can squeeze more juice out of this orange,” he said.

But he added the clampdown may rebound because voters could blame Brown for mismanaging the public finances.

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