CHANCELLOR Gordon Brown will have suffered the mother of all headaches in recent weeks as he seeks to calculate the incalculable.

His troubles stem from the Coalition bombs falling on Iraq - not due to any moralistic stance, but because they are the precursor to economic explosions which threaten to leave a gaping hole in Treasury finances.

As Mr Brown lays out the platform today for economic development in the UK over the coming year, events in the Middle East will undoubtedly be at the forefront of his mind.

The problem is that the Chancellor's financial master-plan is fraying at the seams.

Several careful (some might say prudent) years of restraint erased the debt mountain left as a legacy by the previous administration.

The Treasury coffers swelled to the point where Prudence felt sufficiently assured that loosening his vice-like grip on expenditure would not send the economy back into the mire.

Much-needed spending plans were drawn up to redress years of underfunding for core public services such as health and education.

The foundation for such spending was based on expected UK economic growth rates of 2.5 per cent to three per cent this year, rising to three per cent to 3.5 per cent next year.

These predictions have had to be downgraded by half a point this year as the impact of harsh global trading conditions have taken effect.

There is general expectat-ion from all quarters that next year's anticipated growth rates will also be revised in similar fashion.

This means the Treasury will not have quite the revenue it was relying upon to finance more hospitals and better schools.

It will benefit from Mr Brown's stealthy, "back door" taxation by increasing National Insurance contributions - but there is still likely to be a shortfall.

The financing of the war effort and the consequent contributions to rebuilding war-torn Iraq will add to that problem.

Quite how large that bill will become is where the Chancellor faces his biggest challenge. As yet, he will not realistically know what the conflict will cost.

But, according to Professor John Wilson, Mr Brown is still in control of the situation.

The director of Teesside Business School, at the University of Teesside, said: "I don't see a Chancellor that's suddenly gone from prudent to being extravagant, from an Iron Chancellor to one signing lots of cheques.

"Gordon Brown is still operating in a pretty tight and restrictive way.

"But the war is a classic example maybe of how best laid plans can go awry."

Prof Wilson, an expert in public policy and management, believes today's Budget will be set against "extraordinary and exceptional circumstances".

He said: "No matter what he says, we don't quite know yet whether it is a blank cheque for this war. We don't quite know yet what Britain will have to pay after the war has ended."

The likeliest outcome is a "wait and see" approach with no radical revenue raising policies.

Smokers and drinkers can expect the usual hammering - and there will undoubtedly be the Chancellor's habitual party-piece, unforeseen announcement - but onlookers are best advised to look to the Budget after this one for the real answer to Mr Brown's current dilemma.