Rachel Reeves admits she was 'wrong' to say taxes would not have to rise during election campaign after massive spending plans

The shadow chancellor said she had been 'misled' by the Treasury about the state of the public finances.

Reeves made the admission in an interview with the Financial Times, She said: 'I was wrong to say that taxes would not have to rise. I was relying on the information that I had at the time, but it turned out that the Treasury had not been fully transparent with me about the state of the public finances'.

The shadow chancellor's admission is a significant blow to Labour's election campaign. Labour has been promising to increase spending on public services, but has not said how it will pay for these increases. Reeves's admission that taxes will have to rise will make it more difficult for Labour to convince voters that it can be trusted with the economy.

The Treasury has denied that it misled Reeves. A Treasury spokesman said: 'We have always been clear about the state of the public finances. We have provided the shadow chancellor with all the information that she has requested.'

The row over Reeves's comments is likely to intensify in the coming weeks. The Conservatives are expected to make tax rises a major issue in the election campaign. Labour will need to find a way to defend its record on the economy and convince voters that it can be trusted with the public finances.