21/09/2011 04:40 BST | Updated 20/11/2011 05:12 GMT

Treasury Denies £5bn Spending Claim

The Treasury has denied speculation it could rethink spending plans and pump another £5 billion into the stalling economy.

The BBC said some Cabinet ministers believed extra money could be channelled into infrastructure projects such as roads, railways and superfast broadband networks.

Both Tories and Liberal Democrats have dismissed calls for a "Plan B" that would see the deficit reduction strategy eased in order to stimulate growth.

But there are suggestions that capital spending could technically be raised without performing a U-turn because the Government's fiscal targets are based around current expenditure.

The rumours emerged as the International Monetary Fund (IMF) said countries must take strong action to prevent the risk of a return to recession.

Speaking at a fringe event at the Liberal Democrat conference in Birmingham on Monday night, Energy Secretary Chris Huhne appeared to hint that there could be more flexibility than previously thought.

"Remember... the target that we have is the structural current balance," he said. "It is current not capital spending. That is an important distinction."

However, a Treasury spokesman flatly denied that there was any shift in position. "We have our spending plans and we are sticking to them," he said.