Gordon Brown will have to order a tax rise of up to £7 billion if he wants to deliver on his pledge to increase NHS spending, according to a new report.

Research by the Institute for Fiscal Studies published on Wednesday claimed the chancellor will have to find an extra £5 billion just to maintain the government's spending commitments beyond 2004.

The leading think tank said that if Brown wants to raise overall public spending by 2.75 per cent from 2004 to 2006 he will have to find an extra £2 billion.

The calculations set out in its annual "green budget" find Brown will have to raise the equivalent of three pence on the basic rate of income tax.

The think tank believes the chancellor has few other options as there is little scope to find savings in government departments.

IFS director Andrew Dilnot said Labour now had little choice if ministers wanted to carry on meeting pledges on public services like health, education and transport.

"There is no avoiding that essentially-commonsense point of view. They were rather lucky in the first parliament of their term in office. They had better economic performance and much more tax revenue than they could have expected, even given how the economy performed. That seems now to be over," he said.

Conservative shadow chancellor Michael Howard said the only solution for the government would be to make greater use of the private sector to avoid tax rises.

"It is not quite right to say that if you want more money to be spent on our public services, it all has to come from taxation. The key is to bring into play resources from the private sector so that we can build the world class public services we need in this country without insupportable burdens on the taxpayer," Howard said.