London: Britain plans to spend more on Universities and Research to keep pace with countries such as India and China which will soon pose a "tremendous competition", British Prime Minister Tony Blair has said.

Stressing that the education system needed to be made up of independent state schools of real quality which would look after the needs of every child, Blair said, "Britain needs increased spending on the universities and research to keep pace with countries such as India and China, which will soon be tremendous competition for us."

The British Prime Minister told 'The Times' daily that he opposed any hike in the taxes, stating that they would damage competitiveness against countries such as India and China.

With ministers finalising their spending plans for the next three years before negotiations with the Treasury, there have been warnings that Chancellor Gordon Brown would have to raise taxes or increase borrowing to maintain the rate of growth for spending.

However, several times in the interview, Blair suggested that he regarded higher taxes as dangerous and endorsed Brown's prediction that the going would be "tough".

Mocking the Liberal Democrat plan to pay for extra education funding from a 50 per cent top rate of tax, Blair insisted that such a move would "destroy the competitiveness of the economy".

PTI