Britain's growth forecasts are too optimistic and it is not doing enough to cut debts, a widely-leaked report by the European Commission affirmed today.

The UK must tackle "uncertainty" in plans to cut its deficit, the Commission said as it accused the government of a lack of detail over how it is going to reduce the country's £178bn annual budget deficit.

"The absence of detailed departmental spending limits is a source of uncertainty," the report stated.

Germany, France, Spain and Italy were also warned that their forecasts for growth were too rosy.

Spain was singled out for special criticism by the Commission, which described the growth rate assumed to cut its deficit to 3% of GDP in 2013 as "markedly" optimistic.

The pace of bank restructuring in Spain, which the EU said posed a risk to growth, was also too slow, the Commission said.

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