Chancellor Gordon Brown is putting the final touches to a Budget which could decide Labour's election fortunes.

His fourth and most important budget statement yet will have the power to sway millions of voters by making them feel either better or worse off.

And, with the next poll probably just a year away, Mr Brown will be eager to put in place measures that will maximise support for the government.

The statement will come against a background of rising speculation over possible tax cuts and reports of a rift between the chancellor and the prime minister over the issue.

It has been claimed that Tony Blair was set against further cuts, wanting Mr Brown to spend some of his so-called war chest on public services instead.

The chancellor was claimed to want to lop another 1% of income tax to take effect in a year's time.

The statement also follows one of the government's most difficult periods in office with disillusion amongst core voters and, most recently, the Rover crisis buffeting it.

It has also been forced to admit that the tax burden has actually risen since it came to power - a trend Mr Brown will want to stop, if not reverse.

Quietly confident

As usual, the chancellor has faced intense pressure from competing groups across the country.

Union bosses want increased spending in key areas like health and education while industry will expect him to tackle the problems they are facing with the strong pound.

The less well off and the jobless are looking for help either through tax cuts or benefits increases.

And pensioners and children have both been highlighted as targets for extra help.

What seems certain is that, when he takes the short journey from Downing Street to the House of Commons after the traditional photo opportunity, he will be quietly confident.

His revenues, the state of the economy and falling unemployment have all combined to give him room for some manoeuvre.

Formidable opponent

It is expected he will be able to spend enough extra money in a mixture of tax cuts and investments to delight his supporters and confound his critics while not risking inflation.

The trick will be to pull that off while winning back disillusioned core voters and not frightening off middle England.

Mr Brown will, inevitably, re-announce some of the measures he introduced in last year's budget which will only come into force in April - such as 1p off the basic rate of income tax.

And, of course, Mr Brown's performance will be analysed for what it does for his leadership ambitions and potential.

He remains the most successful of all Tony Blair's ministers and his most important budget will do as much for his fortunes as it does for the government's as a whole.