The man is a power-mad meddler who is damaging economic policy

David Ruffley on Gordon Brown

The committee's report attributes the growth of the Treasury's influence directly to Mr Brown's political power in the Labour government.

"Witnesses commented that the political strength of the chancellor of the exchequer was one factor explaining the current power and influence of the Treasury," said the report.

"We are concerned that the Treasury has recently begun to exert too much influence over policy areas which are properly the business of other departments and that this is not necessarily in the best interests of the Treasury or the government as a whole."

The Treasury now gave the impression of having taken over entirely key policy-making areas like welfare reform, the report added.

Normally that would be dealt with by the departments of trade and industry, and social security.

The report conceded that the Treasury does have a duty to ensure that taxpayers' money was spent efficiently but it should not use the spending review and public service agreements to create the framework within which other departments worked.

Failure on tax reform

"It is important, however, that once expenditure priorities have been set, departments are left with the task of detailed delivery," said the report.

The Treasury's concentration on the work of other government departments meant that it had failed to grasp the problem of tax reform, supposedly one of its key objectives.

"Tax policy may be less exciting than reforming the welfare system but it is no less important," said the report.

Reduce dominance

The report recommended that the influential public services and expenditure cabinet committee that is chaired by Mr Brown be rejigged to reduce the "dominance" of Treasury ministers.

"We recommend that, at the strategic level, the Treasury gives greater attention to ensuring that it gets the balance right in its co-operative workings with other departments," said the report.

Conservative committee member David Ruffley said later: "The report finds Brown guilty of messing up the tax and benefits system.

'Power-mad meddler'

"The man is a power-mad meddler who is damaging economic policy."

Tory Treasury spokesman Michael Portillo said: "The Labour-dominated Treasury Select Committee has delivered a thinly-veiled attack on Gordon Brown's stewardship of the Treasury and taxation policy.

"The Committee identifies that the chancellor has spent three years trying to micro-manage other Government departments while he is actually guilty of mismanaging his own."

Mr Portillo added that tax increases while Mr Brown had been chancellor had increased the tax burden by �25 billion.

Portillo said it was a thinly-veiled attack on tax policy

"Gordon Brown needs to focus on his own department and in particular on cutting taxes," he said.

But the committee's chairman, Labour's Giles Radice, insisted that the Treasury was doing an "excellent job" inspite of any criticisms.

"The report is written from the perspective of strong support for the Treasury's achievements," he said.

"We speak as a critical friend. We think the Treasury is doing an excellent job and want it to do an even better one."