Gordon Brown should throw open the government's books so that they can be examined by an independent body, said the Lib Dems' Vincent Cable.
Mr Cable is the Lib Dem Treasury spokesman
He told the chancellor in many respects he had a good story to tell in his pre-Budget report.
But Dr Cable blamed the Iraq war for the fact the Treasury was struggling to match tax revenues to public spending.
He quoted a report that suggested there was 50:50 chance Mr Brown would have to break his own "golden rule" of only borrowing to invest.
Dr Cable - newly appointed as Liberal Democrat Treasury spokesman - was speaking just after the chancellor had delivered a bullish statement about the state of the nation's finances.
Mr Brown insisted that the government's borrowing meant the UK's debt burden was lower than the average for the world's major industrialised nations.
But Dr Cable said: "In some key respects, the chancellor has a very good story to tell.
"We do have low inflation and low unemployment, we have had steady growth and a respectable level of public debt.
"In other respects the statement shows the chancellor at his worst."
Dr Cable went on to criticised new "tax gimmicks" which he said would only add to an already "overcomplicated tax system".
He said that there were a lot of "red faces" in the Treasury because they had got there figures wrong over the level of nation's debt.
He said that the deficit was £10bn higher at £37bn than Mr Brown had expected just a year earlier.
On Iraq, Dr Cable: "Isn't the brutal truth about this war that the activity the government embarked on, with the full support of the Conservative party, has resulted in a situation where the British taxpayers will continue to have to pay large sums?
"There's no such thing as a free war," he added.
Lower interest payments
The Lib Dem also highlighted the "potentially serious problem" of what he termed "spiralling consumer debt" and he highlighted Bank of England claims that the housing market was over-valued.
That prompted Mr Brown to point out that with current low interest rates mortgage interest payments were half what they had been in the early 1990s.
Dr Cable praised the chancellor's "genuine concern for social justice" but asked why he presided over a tax system in which the poorest 20% now paid 42% of their income in tax but the richest 20% paid 44%.
"Why is it unfair and damaging to the economy to have a 50% tax rate on
earnings over £100,000 on the Lord Sainsburys ... and even the prime minister ...
when it is perfectly reasonable to have a 50% marginal tax rate on a graduate
teacher who under the government's proposal would be paying the top rate of tax
and another 10% of top up fees?"
Mr Brown insisted that many of the poorest families got a range of help from the government including tax credits.