The rise takes net borrowing to £65.3 billion for the five months of the financial year so far, according to the Office for National Statistics (ONS) - more than double the £26.1 billion seen at the same stage last year.

August’s borrowing is slightly lower than the £18 billion forecast by most experts, but still represents the highest ever for the month, and the third biggest monthly borrowing total since ONS records began.

The figures were released as Alistair Darling prepared to hold a series of “one-on-one” meetings with ministers at which he will tell them to identify areas in which savings can be made and after a week fierce clashes between political parties over spending cuts.

The process had started since Prime Minister Gordon Brown admitted for the first time this week that Labour would make cuts in public spending.

A Treasury spokesman said Mr Darling met with fellow ministers “all the time” and that spending inevitably formed part of their discussions.

He said meetings would continue to take place in the run-up to the Pre-Budget Report later this autumn, but played down the reports that a special set of discussions to identify potential targets for cuts had been initiated in the wake of Mr Brown’s speech to the TUC in Liverpool.

News of the meetings follows claims that Treasury figures leaked earlier this week by the Tories imply the UK will have to embark upon the tightest squeeze on public spending since the IMF-imposed cuts of the late 1970s.

The cuts could see Labour’s increases in spending on public services over the past 12 years wiped out, unless a future administration chooses to increase taxes or slash benefits, the Institute for Fiscal Studies warned.

The leaked Treasury estimates envisage annual cuts in expenditure by Whitehall departments of 2.9% in real terms between 2011 and 2013 in order to meet Mr Darling’s goal of halving the £175 billion deficit within four years.

The Prime Minister told the TUC this week that Labour will “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets” in order to meet its target of halving the £175 billion deficit within four years.

But he said Labour would not “support cuts in the vital front-line services on which people depend”.

Shadow chancellor George Osborne claimed leaked Treasury documents show Mr Brown “misled” Parliament on the scale of planned spending cuts, a claim denied by Downing Street.

Liberal Democrat Treasury spokesman Vincent Cable warned it would be “disastrous” to make deep cuts in public spending when the economy was struggling to emerge from recession.

But he said action was needed to cut the deficit by £80 to £100 billion in the years ahead.

He told BBC Radio 4’s Today programme: “I don’t think you can rush into this.

“We are still in the middle of a very difficult recession, unemployment is still rising. To rush in now with cuts in services, people losing their jobs would be disastrous, it would make the recession worse.

“What we have to have is a very clear plan as to how this whole process is going to be dealt with in the years ahead.”

He added: “Simply contracting government spending, increasing taxation at this moment in time runs the risk of getting us into a deeper recession which means the deficit is even worse.”

Mr Darling has forecast that public sector net borrowing will reach a record £175 billion this year as the nation’s finances are battered by recession.

For August, the impact of the slump on tax revenues was shown by a 9.2% fall in current receipts to £34.1 billion. Receipts are more than £23 billion down over the financial year so far, as businesses suffer and unemployment hits income tax revenues.

VAT takings were down 16.2% to £6.1 billion, while income tax takings also fell 12.7% to £10.5 billion during the month.

Meanwhile, the Government’s current spending during August was £45.6 billion, up 2.9% compared to 12 months earlier.

Spending on benefits rose by £900 million to £13.4 billion as a result of rising dole queues. Unemployment rose by 210,000 to 2.47 million in the three months to July, the highest level for more than 14 years.

The UK’s overall net debt stands at £804.8 billion - an increase of £172 billion in the past year - although more than £140 billion of the rise is accounted for by banking sector bailouts.

Mr Brown's spokesman told reporters at a daily Westminster briefing: "Decisions on public spending are a matter for the Chancellor and he will return to this issue in the Pre-Budget Report.

"It's not surprising that the Chancellor would have meetings with ministers about a range of issues and a range of spending issues. He has a number of discussions, sometimes at ministerial level, sometimes not.

"One shouldn't read too much into the fact that the Chancellor is having meetings with departments.

"The Prime Minister and Chancellor have both made clear that tough choices on public spending lie ahead."