Labour and the Conservatives were locked in bitter dispute yesterday over the government's claim that the Tories would cut £35bn from the public services.

Tony Blair and Gordon Brown appeared together at the launch of a new Labour poster, where the prime minister told reporters that £35bn was the equivalent of sacking every teacher, GP and nurse in the country.

However, following questioning from reporters, Labour admitted that the Tories were merely planning on spending £35bn less than the government in 2011.

"What we're saying is we're putting extra investment into schools and hospitals over the next few years, into law and order, into the public services - they're saying they'll spend £35 billion pounds less than that," the prime minister said.

The Tories described the "cut" claim as a misrepresentation because they would save £35bn by increasing spending at a slower rate than Labour up to 2011.

"We have said we will be spending more, year on year over and above inflation," said Liam Fox, Conservative chairman.

"And to call that a cut is at best a misrepresentation, at worst a downright lie."

Labour officials argued that the £35bn claim was at the heart of the ideological debate between a Conservative Party seeking a slimmed-down state and Labour's commitment to public services.

"Everyone is talking about whether the Tories will cut £35bn or some other figure," one Labour strategist said. "That's good enough for us."

Blair will continue the argument in a speech today at the Welsh Labour Party conference.

"The choice at the coming election is more fundamental than the country yet realises," he will say.

"Cutting £35bn from our public spending plans would have devastating consequences for Britain's public services."

The FT claims that Blair and Gordon Brown are on the verge of brokering a deal over the chancellor's role in the general election campaign.

A "friend" of the chancellor is quoted as saying: "There must be clarity about the structure of the campaign but the mood music is changing."

Gordon Brown is Labour's primary asset ahead of the expected general election, according to a post-Budget YouGov poll for Friday's Telegraph.

With the public broadly endorsing the Budget, the survey suggests that Labour would stand a better chance of securing a third term in power if the chancellor was prime minister.

The poll found that 63 per cent see Brown as an "asset" to Labour compared to 34 per cent for Blair.

Asked who is doing the better job, 52 per cent say Brown compared to 17 per cent for Blair.

The poll shows general satisfaction with the Budget, with 44 per cent regarding it as "fair" and more people still preferring increased investment in public services to tax cuts.

The Home Office will not announce the issuing of further control orders after the first 10 were signed by Charles Clarke, the home secretary, last Saturday.

The move means that dozens of suspects could be subjected to the orders without voters knowing about it prior to the general election.

The Liberal Democrats are preparing to table questions on the issue in the Commons next week.

"We have a right to know, in the run-up to a general election and given the confusion over terrorist figures, whether control orders are going to be issued in their dozens over the next few weeks, like anti-social behaviour orders," said Mark Oaten, the Lib Dem home affairs spokesman.

Ministers have overplayed the benefits of giving consumers access to a wider range of health and education providers, according to MPs.

In a report out yesterday, the public administration committee said the "rhetoric does not match the reality".

Although MPs welcomed efforts to give users a wider choice of providers, they concluded that despite encouraging signs, it was "too early to say whether 'choice', especially wider choice of service provider, will provide the benefits of greater efficiency, higher standards and better performance which its supporters claim for it".

President Bush declared he is "100 per cent" behind the McCartney sisters' campaign for justice for their murdered brother.

The American leader was speaking after meeting the family at the White House - one of a series of events for the sisters in Washington yesterday.

Gerry Adams, the Sinn Fein leader, was also in Washington but for the first time in seven years was not invited to the presidential party.

Earlier, in a joint appearance with the president, Bertie Ahern, the Irish prime minister, said: "The political inclusion envisaged by the [Belfast] agreement can only be realised when those who aspire to share in government have brought closure to paramilitary activity, including all forms of criminality."

A reporter from the Daily Mirror got a job on the House of Commons switchboard with fake references.

The reporter is said to have "wandered unchallenged" in the Commons and the Lords and had access to ministers' offices.

Michael Howard will today claim the Human Rights Act is undermining British traditions of fairness.

Speaking at the Conservatives' Scottish conference, the Tory leader will repeat his pledge to scrap the 1998 Act if it is found that it cannot be reformed effectively.

Many hospitals across the country are running up huge debts despite the billions of pounds of extra funding going into the NHS, according to figures seen by the Times.

The government statistics show that at the end of the last financial year, nine hospital trusts had deficits of more than £10 million, 14 had deficits of more than £5 million, and another 39 of more than £1 million.

Almost one third of all NHS trusts were in deficit, with the total standing at more than £350 million.

Margaret Dixon, the pensioner whose cancelled surgery became the subject of a row between Labour and the Conservatives, has had her operation.

She was given a replacement right shoulder during a two-and-a-half-hour procedure at Warrington General Hospital, Cheshire.

MPs on the public accounts committee have heavily criticised the Ministry of Defence over the refusal of the US to allow British forces access to software codes controlling the operations of Chinook helicopters.

In a report, backbenchers describe the situation as one of the "worst examples of equipment procurement".

Knowledge of the codes was essential if the helicopters were to be used for big military exercises, the MPs say.

The government has published a package of measures to help people struggling with their debts.

Debtors who cannot repay the funds they owe because of a sudden illness or redundancy will be given temporary relief for up to six months, under the plans.

Court orders setting out how debts should be paid will be reformed to help debtors pay off up to £15,000.

David Lammy, the constitutional affairs minister, said: "The steps will ensure that debtors are able to resolve their problems at the earliest possible stage and avoid, wherever possible, the cost and stress of court proceedings."

The Office of the Deputy Prime Minister has unveiled a strategy for building 211,000 homes over the next 16 years in Milton Keynes and in the South Midlands - up 45 per cent on previous estimates.

Under the plans, some green belt land may have to be used for housing, John Prescott's department admitted.

Lord Rooker, the minister for regeneration, said: "This is not about the number of homes, it is about creating homes for people, places where they want to work and bring up their families."

The government's public-private partnership has failed to improve London Underground sufficiently to justify the huge expenditure, according to MPs.

The Commons transport committee says there has not been enough incentive for Tubelines and Metronet, the infrastructure consortiums, to improve the efficiency of the Tube.

The MPs are "not confident" the companies would meet more demanding performance targets.

The government has indicated that it is ready to recognise the right of British embassy staff working in the US to be represented by an American labour union, reports the FT.

The Treasury expects house prices to fall this year by one per cent, reports the FT.

A Budget document, published only on the internet, includes the Treasury's internal forecast of the ratio of house prices to earnings.