Chancellor Gordon Brown has missed his annual borrowing target despite revising his forecasts just a month ago.
Official figures from National Statistics showed the Government borrowed £37.8 billion in the financial year which ended in March.
That is £700 million more than the £37.1 billion Mr Brown forecast in last month's Budget and almost £6 billion more than the £32 billion he predicted in his 2005 Budget.
As a result, the UK's net debt rose to an all-time high of £459 billion last year, or 36.6 per cent of gross domestic product.
It came as the Govern-ment's net borrowing hit £7 billion in March compared with £8.5 billion a year earlier.
Economists said borrowing was higher than first expected because the Chancellor got his forecasts for GDP growth wrong.
In his 2005 Budget he predicted growth to be between three per cent and 3.5 per cent but was forced to scale that down to 1.75 per cent as the economy slowed. And economists have warned that Mr Brown's growth forecasts for the coming years are too optimistic.
The latest figures also showed that total receipts last year were up £31.6 billion to £452.8 billion while Government spending swelled £23.6 billion to £456 billion.
Jonathan Said, senior economist at the Centre for Economics and Business Research, said: "What all this says is that the Government has failed to reduce its dependence upon borrowing, with tax revenues falling well short of ballooning expenditure for yet another year - public debt has expanded a massive £145 billion, or 46 per cent, in just four years.
"And although the Treasury has reasonable borrowing forecasts for the new financial year, it risks being £6 billion off its forecasts for the follow-ing two financial years - once again because of its overly optimistic GDP growth fore-casts and its willingness to continue to expand spending."
Mr Said added that the Government's "recent weak forecasting record" meant doubts could be raised over the Chancellor's predictions that borrowing will fall in the coming years.
But despite Mr Brown missing his borrowing targets, the figures showed that he obeyed his second fiscal rule, the sustainable investment rule, which requires net debt to be below 40 per cent of GDP.
The figures from NS also showed that he was on target to meet his first fiscal rule, the golden rule, which requires the budget excluding investment to be balanced across the economic cycle.
Yesterday's figures put the current budget deficit without Government investment at £3.5 billion for March and £10.8 billion for the year - better than the Chancellor's target of £11 billion.
Allan Monks, of JPMorgan Chase Bank, said: "Overall, the Chancellor will be able to claim that he has met his newly revised borrowing targets with a small margin of error.
"With the Chancellor's current growth projections, the golden rule will be met comfortably, and it remains unlikely that there will be any meaningful change to tax and spending plans in the near future."
However, many analysts still expect tax increases, or spending cuts, of around £10 billion sometime over the next few years to bring the budget into balance over the next economic cycle.