The prime minister has said that planned tax rises will not be blown off course by an economic downturn.

A one per cent rise in national insurance due to take effect this April was vital to fund extra cash for public services, Tony Blair said.

And he stuck by his pledge that money would have to be accompanied by reform. "The two go together," he said.

Speaking at his monthly press conference on Monday, the prime minister said the issue of spending was now "the clearest possible political divide" between Labour and the Conservatives.

"The reason why we think that the tax rises are necessary, and I know they are never popular, is that the alternative to tax rises are not no tax rises but an alternative form of taxation," he said.

"They are either people being forced to take out private medical insurance, or social insurance schemes which...are fantastically expensive and will add significantly to the wage costs that people have to bear, employers and employees."

The prime minister said the extra cash was funding expanded capacity in the NHS.

"If we are not prepared to pay for them in this way the alternative is not that people don't pay for them, its that they'll just have to pay for them another way - and I think a less efficient and less equitable way."

But he said that moves to end the NHS's monopoly on healthcare provision would continue.

He said the "one size fits all" system of provision had to change.

"We have to open up our public services, we have to have diversity of supply, choice...that whole agenda's got to come along with the extra money," said Blair.