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Gordon Brown’s housing minister exposed the Government's fears over the falling housing market today when she accidentally left in view a top-secret report as she walked into No 10.

Caroline Flint’s briefing note conceded that house prices would fall by 5 to 10 per cent “at best” this year and that “we can’t know how bad it will get”.

The detailed document carried into Downing Street for the weekly Cabinet session admitted that home building was also “stalling”, in a bleak assessment of UK economic prospects.

The gaffe coincided with new figures showing inflation jumping from 2.5 per cent to 3 per cent and mortgage lending at its lowest level for more than three decades.

The Prime Minister’s support has slumped in recent weeks with the Conservatives assuming a commanding lead of up to 26 per cent in a recent YouGov survey.

Philip Webster, Times Political Editor, said: “This is very dangerous. It is a terrible gaffe, the Government would not have briefed on something this detailed.

“This is the kind of thing that happens to a Government on the slide. Ministers are inside trying to solve the 10p debacle and all this is going on outside.”

Frank Field, a rebel backbencher, yesterday became the first Labour MP to predict that Mr Brown will not be in place at the next election. Alan Johnson, the Health Secretary, also begged for the "character assassination" of Mr Brown to stop amid signs of a split in the party.

The confidential document, headed “Caroline Flint - speaking notes”, was captured by photographers outside Downing Street today.

The notes explained that leading house price indicators were predicting reductions for the first time in recent years. The document read: “Given present trends, they will clearly show sizeable falls in prices later this year - at best down 5% - 10% year on year.”

The document compared current repossession rates with the spectre of the housing crash of the early 1990s, although noting that last year’s figures were only a third of 1991.

A sticker on the plastic folder bearing the notes read “Papers for the Cabinet meeting, 13 May 2008”.

The gloomy forecast continued: “We can’t know how bad it will get. But we need to plan now to put in place effective measures against the risk that it does get worse and prepare for the up-turn.

“It is vital that we show at this time of uncertainty we show (sic) that we are on people’s side.”

Ms Flint’s briefing note conceded that the Government would struggle to hit its own targets on building new homes.

“House building is also stalling. New starts are already down 10% compared to a year ago. Housebuilders are predicting further falls.”

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