The chancellor has been told that his credibility is on the line as he pushes his "golden rule" on borrowing to the limit.

Publishing its "green Budget" on Wednesday, the independent Institute for Fiscal Studies said Gordon Brown's predictions for the economy were "touch and go".

The think tank claimed that the Treasury is not guaranteed to meet Brown's pledge to balance the books over the course of the economic cycle.

If it did not the credibility of his "self-imposed" doctrine would suffer, the report concluded.

"The chancellor has invested considerable political capital in meeting the golden rule and the credibility of the rule could suffer if it is broken," the authors argued.

They predicted that the rule will be met in 2006/07 when the current cycle comes to an end, but with absolutely no margin for error.

While disputing several of the predictions contained within Brown's own pre-Budget report, they accept that "our forecasts do not imply that there is a crisis in the public finances".

"The government's debt remains modest by international and historical standards," they add.

"But the chancellor has said that he wishes to be judged by the fiscal rules he set himself in 1998."

The IFS argue that funds in range of £10 to £17 billion per year will have to be raised to secure the golden rule in the future.

And the report "assumes" that the government will use extra taxes rather than cuts in public spending to plug the hole, urging them sooner rather than later.

"This implies that Mr Brown needs to announce extra tax increases worth £13 billion to expect to meet the golden rule looking forward with the comfort he sought in last year's Budget," it said.

"There is no indication that the chancellor shares this belief. But if he comes to do so, he should act promptly to maintain the credibility of his fiscal framework."

Of the options available for raising revenue the IFS said a rise in National Insurance contributions for the highest earners and a freeze in income tax bands "may be the least unattractive options".

And it noted that the rise in spending on public services as a share of national income will come to an end this year, "underlining the pressure facing many government departments to deliver noticeable improvements... without further increases in their resources."