Alistair Darling's problems over the rapidly worsening state of the Government's finances mounted today ahead of Monday's critical Pre-Budget Report.

The Treasury slid deeper into the red as tax revenues continued to fall short of the Chancellor's plans, forcing him to borrow last month for the first time in any October since 1994.

The public finances were in red by £1.8 billion last month, compared with a surplus of £1.4 billion registered in October last year, in the latest symptom of growing stresses on the Treasury's books.

In the financial year between April to October, government borrowing reached more than £37 billion against £20 billion in the same period last year, and compared with the Chancellor's full-year forecast for £43 billion in borrowing in 2008-09.

City economists said that the figures put Mr Darling on course to sharply exceed his borrowing forecast, with the Treasury likely to end up in the red by £60 billion or more this year. That figure is likely to rise to £100 billion or more in future financial years.

The figures emphasised the headache facing Mr Darling as he decides how much he can afford to give away in a fiscal stimulus of tax cuts and spending increases next week as the Government attempts to shore up the economy and stave off a deep and prolonged recession.

The Chancellor is widely expected to unveil a package worth at least £11 billion, and as much as £30 billion in measures that the Conservatives have signalled they will condemn as unaffordable.

Mr Darling's critics caution that, with the nation's finances already so stretched and borrowing set to spiral as the recession erodes future tax payments, he cannot afford to push the Government's deficit still higher.

But the Chancellor's supporters counter that a fiscal stimulus is essential to prevent a severe economic slump since the credit squeeze imposed by banks makes even steep interest rate cuts a less effective weapon to fight the downturn.

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