Lord Mandelson said the Tories were 'misrepresenting' plans
Lord Mandelson has accused the Tories of trying to create a "false impression" of government plans.
On Wednesday the Conservatives said leaked Treasury papers showed the government covered-up plans for cuts.
But Lord Mandelson told Reuters Television that officials' figures were used "selectively" and did not represent ministers' plans.
The papers suggested government was preparing 9.3% cuts in departmental budgets over the four years from 2010.
It follows months of argument between the main parties about how they plan to tackle Britain's budget deficit - expected to reach £175bn this financial year.
Over the summer Mr Brown had accused the Conservatives of planning 10% cuts between 2011 and 2015 and claimed the government was planning real terms increases in public spending.
But the Conservatives said on Wednesday a leaked Treasury document projected spending cuts in departmental budgets of almost 9.3% in the four years after 2010.
In an interview with BBC Radio Oxford on Thursday, Tory leader David Cameron said Mr Brown had been "completely caught out in telling people the opposite of what he was actually planning to do".
But Lord Mandelson, the business secretary, told Reuters TV: "It's easy to take a leaked document, to selectively lift from that figures that are provided by officials but which don't represent ministerial plans."
He accused Mr Cameron of trying to create "a false impression of the government's thinking and misrepresenting the process we are currently going through in order to adjust public spending in this country to a whole new climate for our public finances".
'Spin too far'
He added: "You will see as the general election approaches in Britain all becoming fair in love, war and propaganda.
"We've started to see this week, although I must say I think it's started to raise some interesting questions about the Conservatives' and Mr Cameron's own candour."
In response, shadow chief secretary to the Treasury, Philip Hammond described Lord Mandelson as the "least trusted politician in Britain," and said even by his standards "this is one spin too far".
"Now he wants us to believe that the government's own figures misrepresent its plans," he added.
On Tuesday, Mr Brown admitted that Labour would have to make cuts in public spending if it won the next election but he said the party would never "support cuts in the vital frontline services on which people depend".
Mr Cameron, who has said a Conservative government would cut public spending, said cutting public spending was "the right thing to do for the country, because the size of the deficit is so out of control".
"There is no relish in doing this, but politics is about telling the truth about the big decisions that need to be made and trying to take the country with you."
The Liberal Democrats say all parties should stop talking about "generalities" and instead put forward "serious proposals for cutting public spending and tackling the UK's budget deficit".
Treasury spokesman Vince Cable says "painful and difficult" cuts are needed over the next five years to restore stability to the economy.