Gordon Brown is to use this weekend's financial summit in Washington to call for co-ordinated tax cuts across the world's major economies to help reduce the depth of the global downturn.

Buoyed by the success of his bank bailout plan - and clear signs of a political revival back at home - the Prime Minister said today that he hoped the G20 summit hosted by President Bush will give a final push to a new world trade deal and take the first steps towards reform of the international financial system.

His remarks all but confirmed that Alistair Darling, the Chancellor, will announce tax cuts in his annual Pre-Budget Report next week, although Mr Brown refused to pre-empt that statement. He was also dismissive of a Tory tax plan announced this morning which involves offering employers a National Insurance break on workers hired from the dole queue.

Speaking of the weekend summit, Mr Brown told a Downing Street press conference: “This is a chance for the world to work together so that a fiscal stimulus in one country can benefit from fiscal stimuluses that are taking place in other countries as well. That is how the world is going to restore economic activity.

“A fiscal stimulus means that you are prepared to add to borrowing in conditions where you have low national debt to enable the economy to move forward.”

An opinion poll for The Times today shows Labour cutting the Tories’ lead to just six points from 15 points a month ago, largely on the back of Mr Brown's handling of the economic crisis. The Populus poll for The Times puts Labour five points up on 35 per cent while the Tories are down four points on 41 per cent. The Liberal Democrats are up one on 16 per cent.

Labour's success - and Mr Brown's apparent willingness to borrow and spend his way out of a recession - has wrong-footed the Tories, who have been trying to formulate their own fiscal package while claiming the mantle of economic responsibility.

The first element of that package was announced today when the party offered a £2,500 National Insurance break for every new worker they take on who has been on the dole for more than three months.

David Cameron, the Tory leader, said that the £2.5 billion scheme would pay for itself by reducing the future cost of unemployment and urged Mr Brown to adopt it immediately to prevent unemployment soaring above its current level of 1.79 million. The Tories say similar schemes have worked in the past in the United States and Canada.

But, in a sign of his renewed political confidence, Mr Brown dismissed the plan as "unfunded" - rich criticism given that he freely admitted that the whole point of a fiscal stimulus would be that it is unfunded.

Of the Tory tax plan, he said: "This is not a funded tax cut at all that has been announced today. The money is not there to pay for what is being proposed,” he said. “They change their policy every day, they have a new issue to get them on the news but it is not serious in measuring up to the problems we face.”

Speaking earlier on BBC One’s Breakfast programme, Mr Cameron's frustration was evident. “For us, there’s a very, very clear principle, which is that you can’t cut taxes unless you can say where the money’s coming from,” he said. “In our proposal today, you can see absolutely where the money is coming from. What Gordon Brown seems to be talking about is just splashing the cash as if there’s no tomorrow.

“If it is borrowing that has got us into such a mess, why is the Government playing so fast and loose with borrowing for the future? All this money they are borrowing will have to be paid back.”

Mr Brown said it was essential that the international community avoided a repeat of the failure of a 1933 world economic conference in London which consigned the world to an era of protectionism. That conference, at old Geological Museum in Jermyn Street, was attended by 66 nations but snubbed by Franklin D Roosevelt, the US President at the time.

“I believe there is a sense in everybody I have been talking to - I’ve been talking to leaders from every continent in the last few days - there is a sense that we need to act to avoid a retreat into protectionism,” Mr Brown said.

“I believe there is an interest for America and for the developing world and for all emerging markets, that we send a signal through a world trade deal that protectionism can be avoided.

“I have been following this very closely, talking to all the different partners, and there is very little now that divides the countries that are there to make a trade deal. So I hope we can see progress if not over the next few days over the next few weeks.”

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