The leader of the Tory party has confirmed that he would not rule out tax increases if the Conservatives won the next general election.

Cameron said earlier this week that tax increases would be needed to help the Treasury's finances, the Daily Telegraph reported.

His comments are set to infuriate Conservative supporters who feel that the party should pursue a tax cutting agenda.

Cameron said: 'Government always has to do what is right to safeguard the public finances. The tragic thing now is that at this point in the economic cycle what the Government ought to be doing is cutting taxes and giving a fiscal stimulus to the economy.'

The Tory leader also commented on plans to implement US-style corporate insolvency procedures, cutting stamp duty, scrapping the rise of road tax on older cars and instead implementing a 'fair fuel stabiliser' - which increases the duty of petrol when prices go down and reduces duty when petrol goes up.

One shadow cabinet member said: 'People have to be aware that we might have to increase taxes, it's a real possibility as the public finances are in a terrible state. Even if the economy is recovering, the public finances will lag two years behind. It should be remembered that Margaret Thatcher had to put up taxes very sharply in the early 1980s after she inherited an equally dreadful economic situation.'

Further reading:

David Cameron warns of Tory tax rises

Lib Dems to hold talks with ICAEW on expenses audit