UK must cut spending fast to stay credible - Osborne

Labour, in power for 13 years, has narrowed a wide gap in those polls and says it will not choke off a fragile economic recovery by tightening fiscal policy too soon. "It will come down to honesty versus dishonesty," George Osborne, expected to become chancellor if the Conservatives win the election, told BBC radio.

"The budget can't conceal this central fact, which is the country has run out of money, and whoever forms the next government is going to have to take some very difficult decisions about spending and to be upfront about the nature of those decisions."

Labour and the Conservatives both say they are committed to tackling a budget deficit which is projected to grow to more than 12 percent of GDP this year, but disagree about the timing.

The third-biggest party, the Liberal Democrats, who could hold the balance of power if neither of the big two win an overall majority in parliament, have adopted a position similar to Labour's, leaving the Conservatives isolated.

Two new polls on Sunday pointed to an indecisive election, with one suggesting Labour would emerge as the biggest party and the other giving the edge to the Conservatives.

The Liberal Democrats say they will shortly spell out a programme of 15 billion pounds of cuts but would hold them back for at least 12 months.

NO DELAY

But the Conservatives have stuck to their guns.

In a joint column with U.S. economist Jeffrey Sachs, published in Monday's Financial Times, Osborne said a credible plan to re-establish sound public finances was essential.