More than ₤500bn of debt has been hidden by the Treasury, indicating that the UK's public debt is actually up to 87% of GDP.
The shocking figures have emerged from the Institute for Fiscal Studies.
The institute used governments calculations – for the cost of public sector pensions, Private Finance Initiative (PFI) schemes and Network Rail's debt, which the Treasury guarantees – and reached a figure of ₤1,100bn, twice the sum that Gordon Brown's office admits to.
According to The Observer, IFS's Christine Frayne said the ₤100bn-worth of PFI payments the government has signed up to were not the same as debts because Whitehall might be able to negotiate them down in future.
But she argued that the Treasury's calculations fail to represent the government's true fiscal position.
'It would be nice to see these liabilities taken into account in some way,' she said.
LibDem Treasury spokesman, Vince Cable, said Brown had 'charged into' billions of pounds worth of deals using PFI, with the intention of disguising the true level of government debt.
Roger Bootle, economic advisor to Deloitte, said that just as public companies have been forced by law to declare the cost of their pension promises, the government should make its own liabilities public.
'In a sense, pension liabilities are a bit like gilts – they're just there. You can't get away from them. I don't see why they shouldn't be on the balance sheet,' said Bootle.
Further reading:
Brown's 'creative accounting' hides fact that Government is dangerously in the red
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