GORDON BROWN pledged yesterday to make state schools as good as private schools with a £34bn spending spree to open a clear divide between Labour and a Tory party planning tax cuts.

In his tenth Budget speech, the Chancellor cheered up Labour MPs engulfed in "loans for lordships" sleaze by promising to make education his priority for the next five years.

At its heart was a pledge to raise annual spending per pupil in state schools - currently £5,000 - to the £8,000 enjoyed by those in the private sector.

Investment in IT equipment and repairs would rise from £5.6bn a year to £8bn in 2011 - a total of £34bn of extra spending over five years, Mr Brown boasted.

The Chancellor also won backbench applause for pledging free national bus travel for all pensioners and the disabled, ending charges to cross local council boundaries.

And he tapped into excitement about the 2012 Olympics by announcing a £600m fund to train gold medal winners and an annual "schools Olympics" moving from city to city.

Mr Brown told MPs: "Our long-term aim should be to ensure for 100 per cent of our children the educational support now available to just ten per cent."

Rejecting tax cuts, he added: "Investing in education comes first - and investing in education is this Budget's choice."

Delighted Labour backbenchers speculated whether the speech, rich in popular measures, had brought closer the day when Mr Brown will take over from an embattled Tony Blair.

But the opposition was quick to accuse the Chancellor of an empty pledge because, as he admitted, matching spending in private schools was a "long-term aim".

Furthermore, Mr Brown had promised only to raise spending to £8,000 per pupil - without taking into account that private schools would, over time, raise that figure.

Going head-to-head for the first time, with - barring mishap - the next prime minister, Tory leader David Cameron condemned his failure to improve schools and hospitals, despite sky-high taxes.

In a furious attack, he said: "Billions raised, billions spent, no idea where the money has gone. With a record like that the Chancellor should be running for treasurer of the Labour Party.

"He is a politician completely stuck in the past," Mr Cameron said, adding: "You can tell how bad the health crisis is - the NHS didn't get a mention."

Liberal Democrat leader Sir Menzies Campbell criticised Mr Brown's failure to face up to the big problems of the environment, pensions and high personal debt.

And pensioners' groups condemned the "disgrace" of the Chancellor's failure to renew last year's £200 council tax rebate for the elderly - handed out in the run-up to the General Election.

But headteachers praised the Chancellor's education budget.

Keith Cotgrave, the headteacher of Longfield School, in Darlington, said: "On the face of it, the budget looks very positive for education.

"This Government came in on an education agenda and in many ways they have put the money up and they should be applauded."

One surprise announcement was for the provision of free further education for people under 25. It is currently free for those up to the age of 19.

David Heaton, the principal of Queen Elizabeth Sixth Form College, in Darlington, welcomed the news and called it a second chance.

"It is pleasing to see that there will be opportunities for people between 19 and 25 to stay in education to gain qualifications up to the equivalent of A-levels."

In a 61-minute speech, Mr Brown set out a green agenda by increasing the climate change levy on businesses blamed for global warming - a tax the Conservatives have pledged to axe.

And there will be a zero rate of road tax for the "greenest" cars, with a sliding scale rising to £210 for the most polluting gas-guzzlers, such as 4x4s.

For the fourth year running, Mr Brown froze petrol duty - at least until September - as he did duty on spirits, sparkling wine and cider. A pack of cigarettes will go up 9p, wine 4p and beer a penny.

A £970m shared equity scheme will help 35,000 first-time buyers on to the housing ladder and the child tax credit to rise by 14 per cent over three years, to be worth £4,500 a year to low-income families.

The Chancellor had been expected to set out some of the responsibilities that could be devolved to the emerging "city-regions", including Newcastle-Gateshead and Tees Valley.

But, apart from pledging to sweep away many of the quangos overseeing regeneration budgets, the separate Treasury report disappointed. Instead, it said town halls would have to wait for forthcoming proposals to change local authority structures and for next year's comprehensive spending review.

Vince Taylor, director of implementation of The Northern Way, a Government-backed initiative to close the North-South divide, said: "The Chancellor's announcement that Government intends to advance its ten-year science and innovation framework with a £1bn health research fund is excellent news.

"We hope this will enable Northern universities to exploit their unique research strengths and secure major opportunities for technology-based economic growth in the North.

"We are pleased to see Government focus upon high level skills. Currently, more than anywhere, the skills in the North are not sufficient to meet the requirements of a modern economy and high level skills will be critical to our success.