Chancellor Gordon Brown has opened his election war chest to produce a �43bn boost in public spending to the year 2004.

The main winners of his second Comprehensive Spending Review were, as expected, health, education and transport. Defence also emerged as a victor, and the New Deal to help the jobless find work was made permanent.

Brown's bonanza

Health: �13bn Education: �12bn Transport: �4.2bn Defence: �2bn Home Office: �3bn International Development: �1bn Scotland: �3.4bn Wales: �2bn N Ireland: �1bn

The chancellor insisted his spending spree did not signal a loosening of his grip on the economy, stressing that there were strings attached to the extra funding. New money would be tied to performance and results.

But shadow chancellor Michael Portillo dismissed the plans as "merely promises for tomorrow".

Backdrop to the election

Mr Brown announced his long-awaited string of spending increases to cheers from the Labour benches.

Gordon Brown: Hands clasped, wallet open

Revealing the backdrop to the next general election campaign, the chancellor told MPs: "We have made our choices. It is now for those who oppose our spending plans to state clearly where their cuts would fall.

"This government has been prudent for a purpose. Our choice is stability, employment and sustained long-term investment.

Cabinet ministers will set out over the next few days some of the detailed spending plans, but education has won an extra �12bn over three years, health a previously-announced �13bn, transport schemes a boost of �4.2bn, and �2bn for defence.

This is the best news for public services in over 40 years Union leader John Edmonds

Mr Brown also announced details of some new schemes which would either be extended or come into force.

Education Secretary David Blunkett, for example, will be able to give head teachers next year "not �290m but �540m" to spend on improvements.

But the chancellor insisted that the spending rises were only possible "by tying new resources to reform and results and by locking in incentives, penalties, inspection and information" to "ensure new investment goes to frontline services".

Transport, local regions, small businesses and matching funds for areas designated for Objective One and other EU funding also won out in Mr Brown's statement.

Portillo pledges tax cuts

Responding for the Opposition to Mr Brown's plans, shadow chancellor Michael Portillo dismissed his statement, saying "all the fine words that we've heard from him are merely promises for tomorrow".

Mr Portillo said it was not "morally superior" to tax people in order to be able to spend generously and promised: "A Conservative government will cut taxes for those people."

Liberal Democrat Treasury spokesman Matthew Taylor accused Mr Brown of adopting a "bust-boom" approach.

He also criticised the lack of help for pensioners: "With �43 billion to spend, Mr Brown's 75p pension rise in March looked miserly - now it looks positively mean".

But trade unions, which had been critical of the government's 1997 decision to stick rigidly to the previous Tory administration's spending limits for two years, gave it a warmer welcome.

John Edmonds, general secretary of the GMB union, said: "People who thought a vote for Labour was a vote to reverse a decline in our public services are at last starting to see their faith repaid.

"This is the best news for public services in over 40 years."