Gordon Brown has announced that he will find the additional spending required to fund the looming war with Iraq.

The chancellor announced he would make resources available on top of the £1.75 billion already committed to the war effort.

In a speech in the City, Brown praised the armed forces and pledged to find the cash required to topple Saddam Hussein.

"Our armed forces do an outstanding job for Britain and today I make clear our gratitude for the work they do and my resolve to ensure our armed forces are properly equipped for whatever lies ahead," he said.

"The international community must not stand by whilst a regime that proliferates weapons of mass destruction defies more than a decade's international agreements," Brown added.

He said the Treasury would make "no apology for saying we will spend what it takes to prevent the proliferation of chemical and biological weapons by states that defy the international community and to advance the cause of disarmament".

"The international community must not stand by whilst a regime that proliferates weapons of mass destruction defies more than a decade of international agreements," he said.

Analysts predict that a short Gulf war could cost the Treasury up to £4 billion - with billions more required to rebuild Iraq once Saddam's regime is defeated.

Last year the chancellor set aside an extra £1 billion to fund military operations and last month he allocated a further £750 million to the war effort.

His decision to offer a blank cheque to the MoD has sparked renewed speculation that the looming war is delaying plans for the chancellor's Budget.

The opposition last week claimed that Brown was attempting to delay the Budget in order to mask further increases in borrowing by a conflict in Iraq.