Britain is facing the tightest squeeze in public spending since the 1970s, after leaked Treasury documents showed a major deterioration in the nation's public finances, the Institute for Fiscal Studies will warn tomorrow.

In a blow to Gordon Brown days after he relaunched his premiership by finally admitting that spending would have to be cut, the IFS will confirm Tory warnings that the last budget in April failed to reveal the depth of the public finance crisis.

The IFS will release its latest commentary on Britain's public finances in the wake of the leaking to the Tories of Treasury documents which showed that departmental spending would be cut by a total of 9.3% between 2010 and 2014.

David Cameron seized on the leak to question Brown's honesty. The prime minister told the Commons in June that the Tories were "ideologically committed to 10% cuts in public services" which was "not the policy of this government".

Cameron believes the leaked Treasury documents are particularly significant because key tables, marked "confidential", are dated 21 April 2009 – the day before the budget. The tables, the internal "live documents" used to compile the Red Book which illustrates budget projects, show departmental spending will have to be cut by 9.3% between 2010-2014. Within two months of the budget, Brown launched a month-long attack on Cameron as a cutter in which the prime minister depicted the Tory leader as "Mr 10%" – almost the same amount as the cuts outlined in the Treasury documents.

Downing Street said today that Brown had not misled parliament because no plans had been set out for public spending beyond 2010-11. The leaked documents show such deep cuts in departmental spending because the Treasury predicts a sharper than expected increase in two key costs of the recession – social security payments and debt interest payments – described by Brown in 2000 as the "costs of social and economic failure". The IFS embarked on a hasty revision of its forecasts today because the leaked documents provide a breakdown of projections for government spending up to 2014; at the time of the budget these detailed projections were only provided until 2012.

Robert Chote, head of the IFS, said: "There has been something of a gap between the government's rhetoric and its arithmetic over the period since the budget. The prime minister came up with a variety of increasingly imaginative formulations over the summer to suggest spending wouldn't actually be falling."

The IFS will underline the gravity of the public finances tomorrow when it warns that the unprecedented increase in spending over the last decade will have to be "completely reversed" by the next government – whoever wins the election – unless taxes are raised and welfare payments are cut.Chote said: "The Treasury is expecting to pay a lot more in debt interest, social security payments and other things it doesn't have much day-to-day control over. We are looking to have to cut public spending by 3% a year in real terms. We haven't seen anything like that since the 1970s."

But the IFS report will also place pressure on Cameron. It shows that the Tories will have to cut departmental spending by 14% from 2011-14 if they maintain their two spending commitments – to increase NHS spending in line with inflation and to meet the UN target of spending 0.7% of GNI on overseas aid by 2013. Cameron, who last week pledged to increase public spending at a lower rate than Labour, today refused to rule out imposing cuts beyond the 9.3% in the Treasury documents. "If you start [cutting] earlier it is a less painful and better process because you want to start from a lower base," he said.

The leak

What do the leaked Treasury documents reveal?

The forecast on the eve of the last budget that departmental spending would be cut by 9.3% in 2010-2014.

Why such deep cuts?

The breakdown of government spending until 2014, not released at the time of the budget, shows a sharper than expected increase in social security and debt interest payments.

Will this lead to a revision of spending plans?

Not for Labour which has not made any commitments after 2011. The Tories have two commitments: to increase NHS spending in line with inflation and to meet the UN target of spending of 0.7% of GNI on overseas aid by 2013. The IFS, which had said this would mean cuts of 10% in other areas, will say this will mean 14% cuts.