A board of economists often conferred with by the Treasury said that the fact that coalition will mount VAT to 20pc in 18 months, is observed by City economists as an almost certain prospect.

Warnings were also sent out by others that the rise in VAT might increase hardly over a fifth of the profits needed.

It was cautioned by Jonathan Loynes of Capital Economics that the Office for Budget Responsibility, charged with evaluating how much to cut the discrepancy, might advise the Government to increase taxes by £50bn.

Mr. Loynes said, "Tax increases eventually worth £50bn or more may be needed, at least some of which may be implemented in the emergency budget".

Out of the 28 independent economists, at present the Treasury reviews on their predictions.

It has been said that a raise to 20pc would make it equal with some European states.

According to Justin King, Chief Executive of supermarket J Sainsbury, a raise in VAT appears possible.

When experts specified that the coalition's preliminary deal could be interpreted as an economic slackening rather than a tightening, the warnings were out.

It is said that any VAT increase would have a considerable blow on high street sales.