In a speech in New York, Mr Brown predicted strong economic growth for the UK over the next two years.

But he indicated that this would not lead to major tax cuts or a great loosening of the public purse strings.

He warned his audience at the Council for Foreign Relations that increased prosperity would be put at risk if he did not maintain "tough discipline in monetary and fiscal policy".

However, union leaders representing public sector workers have dismissed this warning and have called the chancellor to increase spending on vital services and those who work in them.

Rodney Bickerstaffe: Public services must have greater investment

Rodney Bickerstaffe, General Secretary of the UK's largest union, Unison, said Mr Brown should not simply sit on the surpluses building up in Treasury coffers.

Speaking from the TUC's annual conference, he said: "We should invest in public services such as schools, hospitals and social services - and in the people who work in them.

"If there is any extra money the government should use it to repair the damage caused over the last 20 years under the Tories."

Nigel de Gruchy, General Secretary of the teacher's union, NASUWT, said Mr Brown should make the resources available to increase the wages of poorly-paid state workers.

"Nurses and teachers are excellent candidates for any surplus which their sacrifices over the years have helped to create," he said.

'Labour failing'

The BBC's Greg Wood: "The Chancellor has made it clear that a tight grip will be kept on the purse strings"

The union leaders' comments were echoed by Liberal Democrat economics spokesman Edward Davey.

"If the chancellor is so upbeat about growth there is no excuse for delaying major new investment in our schools, hospitals and police," he said.

Gordon Brown: Hopeful signs for the economy

He attacked Labour for pledging to stick to public spending targets set by the previous Conservative government.

Keeping a tight rein on public spending was also incompatible with the government's promises to improve health and education, he added.

"By keeping to Tory spending cuts in the first two years, Labour has failed to tackle the funding crisis in the NHS and the education system.