Chancellor Gordon Brown yesterday gave himself more borrowing power by changing the basis for his self-imposed rules.
He announced that the present economic cycle probably began in 1997, two years earlier than previously thought.
These were Mr Brown's first two years as Chancellor when he adopted a "prudent" policy of sticking strictly to the tough limits on public spending he inherited from his Conservative predecessor, Kenneth Clarke.
Surpluses accumulated during these years will now give him an estimated £12.5 billion extra to count against deepening deficits that followed.
This requires the Chancellor to meet all current public spending out of tax revenues and to borrow only for investment projects over the economic cycle. The Treasury had previously said this had started in 1999.
Mr Brown coupled news of the change yesterday, given to the Treasury Select committee, with a decision to postpone the next comprehensive spending review until 2007, to take effect in 2008. This would effectively set the Government's priorities until after the next general election. Some commentators yesterday took the postponement as a sign that Mr Brown expects to succeed Tony Blair as Prime Minister in 2008.
Mr Brown told the Treasury committee that the change in the starting date for the economic cycle was fully justified by significant revisions by National Statistics to data for Britain's economic growth.
"The statement about the cycle was always a provisional one," the Chancellor said. "In fact many of the academic experts on the committee have said that in their view the cycle probably started in 1997 and not in 1999.
"It is clear if you look at the growth rate in each of the years that it was above three per cent. We are giving historical accuracy to what other people have suggested."
The National Institute for Economic and Social Research called for an independent expert assessment of the balance of the current budget to replace the "golden rule".
Mr Brown said he would ask the National Audit Office to assess the validity of the dates of the economic cycle.
"We will be putting the end of the previous cycle and start of the next cycle to the NAO now," he said.
But Alan Clarke at BNP Paribas commented "The Chancellor's economic projections are proving massively too optimistic and hence tax receipts are likely to undershoot his forecasts.
"This appears to be a fortunate opportunity to move the goalposts again."