At almost the moment that Gordon Brown was taking off from Heathrow on another tour to garner support for another fiscal stimulus, Mervyn King fired a broadside that reduced relations between them to their lowest point.

It was a day on which the Governor of the Bank of England moved effortlessly from a hearing before MPs to an audience with the Queen at Buckingham Palace and then back to Westminster for a gentle grilling from peers. But his appearance before the Treasury Select Committee at 9.45am was explosive and threatened to bring into the open tensions between No 10 and the Treasury over the scale of any expansionary measures in the Budget on April 22.

Mr Brown was heading for the European Parliament in Strasbourg to tell MEPs that the leaders of the major economies at next week’s G20 summit should do “whatever it takes to create growth and the jobs we need”.

However, in a room with a portrait of Baroness Thatcher looking down on him, Mr King delivered an embarrassing blow to Mr Brown’s hopes of being able to outline a second credible British stimulus next month.

“I think the fiscal position in the UK is not one where we could say, ‘Well, Why don’t we just engage in another significant round of fiscal expansion?’,” he said.

For good measure he added that monetary policy — interest rates and quantitative easing — should “bear the brunt” of future action.

Telling Mr Brown that he could not afford another stimulus when he was about to ask for support for “the biggest fiscal stimulus the world has ever agreed” was described as deeply unhelpful by ministers.

There is intense irritation with Mr King in Downing Street, where he was regarded as slow to react to the banking crisis and naive in giving briefings to the Tories that were later leaked.

More damaging still is the impact on relations between Mr Brown and Alistair Darling, the Chancellor. There is no evidence of a split over the Budget. But Budget briefings have suggested that Mr Darling is deeply cautious about taking on more debt. When he told foreign reporters this month that a stimulus “has been widely agreed but now needs to be implemented”, it was taken as a call for restraint.

Mr Brown, however, is widely believed to want to use next week’s G20 as “cover” for another substantial injection into the economy.

By appearing to side with the Treasury position, Mr King will have lost any remaining friends at No 10.

From the start Mr Darling was cautious about the measures introduced in November’s Pre-Budget Report, calling them “timely, targeted and temporary”.

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