By Nick Assinder BBC News Online political correspondent

Chancellor Gordon Brown has pledged to stick to the government's current spending plans but hinted that future increases may be limited by the international crisis.

In his keynote speech to the Labour conference he insisted now was not the time to relax his purse stings further.

He insisted he was determined to cut off the source of funding to international terrorists.

We now call upon all nations to implement financial sanctions to ensure that just as there is no safe haven for terrorists, there is no safe hiding place for terrorist funds

Gordon Brown

And he pledged he was not out to privatise the public services, but warned that modernisation was essential.

And he insisted that by sticking to its policies, Labour could deliver the country everybody dreamed of.

But it was also clear that, with budget surpluses set to fall over coming years, he will be forced to either limit future spending, raise taxes or - most likely - borrow more.

In the most upbeat speech of the conference so far, the Chancellor attempted to balance the need to maintain discipline on spending with his pledge to create full employment, end child poverty and produce world class public services.

Action on funding

He also confirmed that �60m of terrorist cash had already been frozen in Britain, and he urged other countries to take equally hard action.

"Ready access to finance is the life blood of modern terrorism and no institution, no bank, no finance house anywhere in the world should be harbouring or processing funds for terrorists.

"It is because here in Britain we are already implementing last year's United Nation's resolution on terrorist financing that bank funds amounting to $88m dollars have now been frozen in Britain.

"And today we now call upon all nations to implement financial sanctions to ensure that just as there is no safe haven for terrorists, there is no safe hiding place for terrorist funds."

Brown praised Tony Blair's leadership

He insisted his tough economic regime was now paying dividends.

"We are today in a better position to withstand the ups and downs of the economic cycle and the pressures and the difficulties we now face."

"Testing times demand more discipline not less, so when we are told that this is the time to drop our spending limits, relax our discipline, abandon our fiscal rules and break our manifesto promises on tax, I say to you we shall not relapse back into the irresponsible quick fixes of the past.

Turning to the continuing row over private involvement in the public services he urged the conference to support modernisation of the public services.

"We reject those who argue that our public spending on public services is a drain on our economy and we reject those who advocate privatisation and public spending cuts.

Economic discipline

"But those of us who believe passionately in public service have a special responsibility to ensure their effectiveness and we can only deliver world class public services if we change, update and modernise."

And in a conclusion clearly aimed at inspiring the party and setting out his political agenda, he declared: "So conference, inspired by our history, more determined because these are testing times, let the message ring out - we can and will achieve in our generation that better future.

"Security and stability - yes. And upon that platform a Britain of full employment, and enterprise open to all, an end to child and pensioner poverty, world class public services and not just nationally but internationally, justice for all.

The Britain of our ideals

"These are the great purposes that we as a party have set ourselves, the great goals that are the standard by which, over the coming years we will be judged.

"This is the vision which can unite our whole country and inspire in Britain a new progressive consensus.

"Have confidence - there is a purpose in politics. Our values are right for this time, nationally and internationally, we can rise to the challenges if we meet them together.

"Have confidence and together we can and will build the Britain of our ideals."

It was the most authoritative speech of the conference so far and won him a long ovation, once again showing he is still the darling of the party's grassroots.