Speculation is growing that Gordon Brown will be forced to introduce tough measures to stabilise house prices and ensure that first-time buyers will be able to afford to get on the property ladder.

A key housing report commissioned by the Chancellor is expected to recommend that an extra 100,000 new homes need to be built each year to keep up with population growth and reduce house price inflation.

The Barker report, which will be published on Budget day, is likely to say that the low level of housebuilding, with fewer new homes built now than in the 1920s, is responsible for rising homelessness and rampant house price inflation.

And Mr Brown is expected to back its recommendation to double the output of social housing, at a cost of £1.5bn.

However, the Council for the Protection of Rural England's Neil Sinden says that "there is no evidence that there is a desperate need to build more houses on top of what is already proposed."

Stamp duty

Mr Brown is reportedly considering other tax measures to curb the housing boom.

STAMP DUTY RATES Up to £60k: 0% £60,001 to £250,000: 1% £250,001 to £500,000: 3% Over £500,000: 4%

But housing groups are already up in arms about "stamp duty sting", claiming that the numbers paying stamp duty when they move house has doubled since Labour came to power from 667,000 to 1.2 million.

"First time buyers have been dissuaded from buying because of stamp duty," said Jason Clarke of the Halifax.

If I want to save for a mortgage, I can't save for a pension as well, so my property will become my pension Mark Wood First time buyer Read more here

With stamp duty on houses now yielding £3.6bn, however, any reductions are unlikely, as the government is facing a Budget crunch, with public sector net borrowing running at nearly £40bn this year.

Despite Treasury denials, some observers believe that Mr Brown might consider introducing another tier of stamp duty of 2% on houses valued at £150,000-250,000.

And reforms of council tax are also under active consideration, with the Barker report likely to call for a property tax more closely linked to the market value of housing.

Battle over defence and crime

With the Chancellor facing a budget shortfall, speculation is also growing about possible tax increases or spending cuts that might be needed to bridge the growing Budget gap.

Speaking on BBC One's Panorama, Tony Blair's former economic adviser, Derek Scott, said that the rapid growth of public spending would have to slow.

SPENDING CUT WARNING We certainly can't continue to increase public spending in the next three or four years, in the way we have done in the past three or four years. Derek Scott, former economic adviser to Tony Blair Read more of Derek Scott's interview on Panorama

"I believe that if you have a rate of increase in public spending that is faster than sustainable rates of growth, then over a period it will have a damaging effect.

"We certainly can't continue to increase public spending in the next three or four years, in the way we have done in the past three or four years."

But Dave Prentis, boss the huge public sector union Unison, said that the Chancellor should "keep his nerve" and stick to his public spending plans, while letting "borrowing take the strain."

While Mr Brown will reveal the overall size of the public spending "envelope" for the next three years, the detailed figures for departmental spending will only be published in July.

But Mr Brown is already engaged in a bitter battle with defence chiefs, accusing them of waste and inefficiency and threatening to cut their budgets.

And John Grieve, the Home Office's most senior civil servant, warned in an internal memo leaked to the Independent on Sunday newspaper that crime-fighting could also suffer.

"To have the maximum impact we will have to target resources on our highest-crime neighbourhoods. Within a tight budget, that will be difficult as we also need to avoid damaging retrenchment in the rest of the country," he said.

Transport and education are also believed to be fighting a rearguard action against further cuts.

Business up in arms

With a General Election looming in perhaps a year, it is judged unlikely that Mr Brown will risk alienating the voters with major tax increases, although there is some speculation over changes or increases in VAT or national insurance rates.

But there is no doubt that he will undertake a crackdown on tax loopholes.

One certain target is a new provision in the tax code that allows people who incorporate as companies and earn under £15,000 to pay no tax.

Although introduced by Mr Brown himself to encourage entrepreneurs, the Inland Revenue is alarmed by the number of new small business incorporations and the loss of revenue.

So, to the fury of business leaders, the Chancellor is likely to close this loophole.