David Cameron raised the political temperature of the House of Commons yesterday with a devastating attack on Gordon Brown's lack of "moral authority".

In the first Prime Minister's Question Time since the summer recess, and only days after the Prime Minister squashed the prospect of an early election, Mr Cameron ruthlessly mocked and taunted the Prime Minister for not going to the polls.

Complaining Mr Brown was treating people "like fools", the Tory leader, buoyed by cheering back benchers, mocked: "He's the first Prime Minister in history to flunk an election because he thought he was going to win it."

Mr Brown's attempts to retaliate missed the mark. As he strove to highlight the differences between the Labour government and the Tory opposition, Mr Cameron retorted: "I'll tell you what. If you've got some questions about our policy, find a bit of courage, discover a bit of bottle, get in your car, go down to Buckingham Palace and call that election. For 10 years you have plotted and schemed to have this job, and for what? No conviction, just calculation. No vision, just a vacuum. How long are we going to have to wait before the past makes way for the future?", he added.

Labelling Mr Brown "a phoney", Mr Cameron claimed the Prime Minister had already lost his political authority and now was losing his "moral authority".

Mr Brown, and his colleagues, visibly blanched under the ferocity of the attack. Senior ministers generally accepted that yesterday was a day "to be got through". Later they said they now had "to get on with it".

While Tony Blair was Prime Minister, the best Mr Cameron achieved was a score draw and while yesterday's Prime Minister's Questions might not be so easy for the Tory leader next week, the Tories believed last night that they had drawn prime ministerial blood.

Mr Cameron pressed the Prime Minister to say if the draft pre-Budget report that was written before the Conservatives' conference had included plans to cut inheritance tax or on levying non-domiciles.

Mr Brown responded that the government had raised the exemption on inheritance tax on 10 occasions since 1997, and he claimed that the Tory leader would have to explain why the Conservatives' plans would only generate £650m rather than the £3.5bn that they claimed.

Earlier, Alistair Darling rejected claims that he had stolen Conservative proposals on inheritance tax and non-domiciled residents and insisted he had set out a "long-term" vision for the country. He said he had been working on the changes that were made yesterday since he became Chancellor.

The government's hopes of presenting its spending plans as a further boost to investment in public services received another dent yesterday when the influential Institute of Fiscal Studies (IFS) warned that spending growth was "considerably slower" than in previous reviews and "might prove incompatible with improving public services and reducing child poverty".

Robert Chote, IFS director, said: "Growth in total public spending will roughly halve from the rates enjoyed in Labour's years of plenty."

The institute also warned there was less room for manoeuvre for the Chancellor on meeting his rules on sustainable investment after he announced that borrowing would increase by £2bn in 2010/11. Mr Chote added: "He has simply chosen to borrow more, further narrowing the already small amount of headroom beneath the Treasury ceiling for public debt. For a party which loves to lecture its opponents on the wickedness of unfunded tax cuts, this looks suspiciously like an unfunded spending increase." The Tories also said the pre-budget report raised taxes by £1.4bn.

George Osborne, Shadow Chancellor, said: "Gordon Brown's budget is unravelling because people look at the small print. The Chancellor said the budget represented a tax cut. But independent experts now find that there is a £50-a-week tax bombshell for families. This shows just how cynical and calculating Gordon Brown's government has become."