Leaked papers show Labour's 'reckless' approach to economy, claim Tories

The report was written when Tony Blair was still Prime Minister and Balls was a backbencher.

The Conservatives said the latest revelations showed that Labour had taken a "reckless" approach to Britain's economy.

But Balls, the shadow chancellor, argued that the Tories were trying to "rewrite history" by sensationalising the contents of the leaked papers.

He said that whoever was making his private papers available to the Daily Telegraph was clearly politically motivated and accused the perpetrators of deliberately misrepresenting the content. The latest document contained suggestions for how to make savings ahead of the Comprehensive Spending Review of 2007.

It suggested that departmental spending increases above inflation ought to become the exception not the rule.

The Conservatives claim this advice was "recklessly" ignored.

But Labour says that, at the time, the Conservatives were committed to matching their spending plans and the then Chancellor Gordon Brown was running a lower deficit than he had inherited.

Balls said: "Once again the headlines and allegations are not remotely substantiated by either the content of the documents or the reality of what happened.

"However much the Conservative Party and their supporters sensationalise these papers, and try to rewrite history, their allegations are not borne out by reality."

It is understood that more than 30 memos written by or belonging to Balls have disappeared from the Department of Education, where the shadow chancellor used to work, during last year's general election.

During the last government, Balls was one of Gordon Brown's closest advisers.

Among the first batch of leaked documents were memos containing plans for Brown to succeed Blair as Prime Minister in 2005, shortly after Blair had led the Labour Party to its third election victory.

Balls denied that he and Brown had plotted to oust the Prime Minister, claiming that the Daily Telegraph's interpretation of the memos was "not true".

The Cabinet Office is looking into whether there were any "breaches of document security within government".