GORDON BROWN promised to make Britain's schools the best in the world today as he prepared to put education and skills at the heart of his Pre-Budget Report.
Mr Brown said Britain needed to "do better" and produce more graduates to compete with countries such as India and China.
His remarks came ahead of what will almost certainly be his final Pre-Budget Report - a package of measures which is also expected to include bad news for motorists in the form of an end to the three-year freeze on fuel duty.
"We have got to have 21st-century schools with the white boards, computers, the facilities, the sports facilities, which are going to be important in the future - the music and culture and everything else," said Mr Brown.
"We want to have the best schools in the world, we want to have the children's centres, the colleges and the universities, so there are chances for people."
Mr Brown is expected to announce new cash for the refurbishment of thousands of state schools, including the construction of new facilities for arts and sports.
He is also set to use his tenth annual PBR to burnish his green credentials ahead of his expected move to 10 Downing Street next year.
Analysts predicted an end to the three-year freeze on fuel duty increases as part of a package aimed at encouraging people to reduce their emissions of greenhouse gases.
Alongside a fuel tax rise in line with inflation, there may be a doubling in levies on air passengers and possibly further increases in vehicle excise duty for gas-guzzling 4x4s.
The case for green taxes was made by October's Stern Report, commissioned by the Chancellor, which argued that 1% of global GDP should be devoted each year to preventing global warming.
Other Treasury reports on planning, skills and intellectual property have also given an insight into the Chancellor's thinking as the PBR approaches.
The intellectual property report by former Financial Times editor Andrew Gowers was today expected to recommend tougher action against music and film pirates - something Mr Brown is likely to back.
And he was expected to announce plans to take forward the recommendation of yesterday's Leitch report to improve Britain's vocational skills base.
He was also set to indicate his approval of economist Kate Barker's review of planning - also released yesterday - which recommended the streamlining of the system to allow for faster building of major construction projects.
Unlike last year, when he was forced into the embarrassing downgrading of his predictions for growth, Mr Brown was today able to boast that the UK economy is expanding even faster than he expected.
He was likely to say that the 2.75% growth achieved this year will be repeated in years to come, boosting tax revenues and giving him more leeway with public spending.
The possible further increases in vehicle excise duty for gas-guzzling 4x4s come as it was reported that sales of the cars have suddenly slumped in the face of threatened tax rises.
Existing owners are also facing losses because the re-sale value of the cars has dropped significantly.
It is believed that the Society of Motor Manufacturers and Traders will announce tomorrow that sales of new 4x4s fell by more than 15% last month compared with November 2005, and have fallen in every month this year except March.
Mr Brown was denounced by his Conservative shadow, George Osborne, as a "Wizard of Oz" Chancellor, whose loud boasts of economic success masked actual failure.