THE Chancellor will today unveil a Budget designed to cut dole queues and create new “green” industries, but it will be dominated by the deepening recession and public finances in disarray.

Alistair Darling will announce a £2bn package to guarantee a job or a training place to any young person unemployed for 12 months and pour extra staff into hard-pressed Jobcentre Plus offices.

The Chancellor will also pledge a £500m “green stimulus” for giant new wind farms off Britain's coastline and to create jobs installing fuel-efficient boilers and better home insulation.

And housing developments that have ground to a halt because of the credit crunch will be rescued by a £1bn cash injection for the crisis-hit construction industry. The suspension of stamp duty on properties costing £175,000 or less will be extended.

But Mr Darling’s attempts to present a “Budget for recovery” will be overshadowed by figures confirming Britain is in the deepest recession since the Second World War and that public debt is ballooning.

He is expected to say that the economy will shrink by more than 3% this year and that government borrowing will top £160bn, taking a decade to repay. Debt will peak at more than £1trillion.

Shadow Chancellor George Osborne has already dubbed the Budget “a day of reckoning” for the Government, when huge policy mistakes will come back to haunt ministers.

However, the Chancellor – who has already pledged £15bn in Whitehall efficiency cuts – is expected to resist Labour backbench pressure to bring forward a new 45% tax rate on those earning more than £150,000, due in 2011.