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    Osborne's deficit plan will come under regular scrutiny by the IMF under plans drawn up to prevent systemically important countries triggering another financial crisis. The IMF have said that Britain is one of the countries that poses a risk to the world's economies.

    The chancellor said the country's high public and household debts and the need to repair the finances of government-owned banks put it in the front line of countries due to be singled out by the IMF, though he welcomed the plan saying he was sure it would give the government's austerity measures a clean bill of health. Osborne said: "I fully expect Britain to be chosen given its high levels of government and private debt. The UK will be able to demonstrate that yes, it has a problem, but it has a credible solution."

    The IMF recently criticised the US for its failure to agree cuts to its growing government debt. The document is credited with playing a key role in convincing the Obama administration to ditch its growth strategy in favour of deep reductions in spending.

    President Barack Obama has put forward a plan to cut 8% of GDP by 2015/16, which is a similar target to Osborne's. Labour said the US plan differed because the administration waited until strong growth was under way before considering cuts, unlike Britain where the economy has contracted after being hit by early cuts.

    Balls said: "George Osborne is once again playing fast and loose with international comparisons to score political points. As the IMF's report made it clear George Osborne is going much further and faster than any other major economy in the world. He is the one who is isolated.

    "He is also forgetting that by taking a steadier approach to secure the US recovery President Obama now has a growing economy and falling unemployment which is crucial to getting the deficit down. But in Britain, by cutting too deep and too fast, George Osborne has delivered slow growth and higher unemployment, which is why he will now have to borrow £46bn more than he planned."

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