The impact of the double-dip recession on the public purse has been underlined as official figures revealed a larger-than-expected surge in Government borrowing.
Public sector net borrowing, excluding financial interventions, such as bank bailouts, was £17.9 billion in May, up from £15.2 billion the previous year, the Office for National Statistics said.
The surge was driven by a 7.3% fall in income tax receipts and an 11.7% jump in welfare benefits, providing evidence that the struggling economy is piling pressure on the Government's already-stretched finances.
While May is only two months into the financial year, the weak figures will trouble Chancellor George Osborne, who is aiming to trim total borrowing in 2012/2013 to £120 billion, excluding a one-off boost from the transfer of the Royal Mail pension fund into Treasury ownership.
The Chancellor is in the process of rolling out a series of tough austerity measures in a bid to cut the budget deficit, which include billions of pounds of spending cuts and hundreds of thousands of public sector job losses.
But the economy fell back into recession in the first quarter of the year, which has significant implications for tax revenues, while high levels of unemployment are increasing the burden on the state.
In a further blow to Mr Osborne's hopes, total borrowing for the last three financial years was revised upwards due to methodology changes.
Total borrowing, excluding financial interventions, in 2011/2012 was revised up by £3.2 billion to £127.6 billion, above the £126 billion target for that year. Total government spending was 7.9% higher in May at £55.1 billion, while total tax receipts only rose by 1.6% to £38.7 billion.
A spokesman for the Treasury said: "It is too early in the financial year to draw conclusions about the year as a whole, especially as today's public finances data include a number of one-off factors and temporary distortions.
"The Government is committed to dealing with the deficit, which will help keep interest rates lower for longer and support millions of families and businesses across the country."