Former Labour leadership challenger says bloc of 30-40 left-wing MPs would force party to end austerity if it won.
Ed Balls's less stringent plans mean a dramatic gap with the Tories.
The Chancellor has vowed to cut £12bn from welfare - but he's announced just £3bn of savings.
The Chancellor has made a virtue of coalition government and of missing his deficit targets.
Shadow chancellor says the Conservatives have blundered by admitting day-to-day spending will be reduced to its lowest level for more than 50 years.
The Chancellor neutralised some of Labour's strongest attack lines - but there was no knock-out blow.
The low point in 2000 pre-dated the government's spending increases for health and education.
The shadow chancellor will unveil a full analysis of how the Tories' plans would hit public services.
The PM is giving the false impression that most of the pain lies in the past.
The shadow chancellor remembers that it was fear of "Tory cuts" that handed Labour victory in 2001 and 2005, and denied the Conservatives a majority in 2010.