U.K. Treasury chief Alistair Darling laid out a government-spending plan that will put the country deeper into debt than it has been in decades, underscoring the dismal state of the economy and the political challenges facing Prime Minister Gordon Brown.

Mr. Darling said government borrowing will amount to £175 billion ($256.7 billion) in the coming year, or 12.4% of gross domestic product -- much higher than the government's November estimate of £118 billion.

The...