Public borrowing has risen sharply as official figures published on Thursday warned that bank bail-outs could add up to £1.5 trillion to the national debt.

Net borrowing between April and January soared to £67.2bn, the Office for National Statistics (ONS) said - prompting forecasts it could hit £100bn this year.

The ONS added that Royal Bank of Scotland and Lloyds Banking Group - rescued with £37bn in taxpayer cash - were being classed as public corporations.

Adding their liabilities onto the public books would add between £1 trillion and £1.5 trillion to net debt, it estimates - equivalent to between 70 per cent and 100 per cent of the UK's entire output.

The public finances have come under increasing strain in a worsening recession as tax revenues fall and benefit payouts rise. January’s corporation tax receipts were down nearly a quarter from the same period last year.

The poor borrowing figures put chancellor Alistair Darling's pre-Budget forecasts of £78bn in borrowing for the year to April - already revised upwards once - under threat.
The government's total current receipts were £6.7bn lower than last year, with spending £2.8bn higher than 12 months earlier.

Net debt as a proportion of GDP was supposed to stay below 40 per cent under the Treasury's former fiscal rules but rose to 47.8 per cent last month, it added.

Philip Hammond, the shadow chief secretary to the Treasury, said the figures were "just the beginning of Gordon Brown's debt crisis".

"Once the liabilities of the bailed out banks are included, our true national debt is now significantly larger than our national income, adding to the risks facing the economy and the burden on future generations,” Hammond said.

Liberal Democrat Treasury spokesman Vince Cable added: "Ministers must now accept the reality that they effectively own two large banks and use them to ensure the flow of much needed credit into the economy."

Angela Eagle, exchequer secretary to the Treasury, said Conservative calls for spending restraint would be "a recipe for complete disaster".

"We are unashamedly sustaining public expenditure at a time when there is a global economic downturn to support the economy," she told the BBC.