Chancellor George Osborne could raise capital spending on broadband and other vital infrastructure by up to £5 billion without abandoning his deficit reduction strategy, according to some senior politicians.

Cabinet ministers believe investment in broadband, roads and other infrastructure projects could be significantly increased in a bid to encourage economic growth, without having to ditch what has become known as Plan A, reports BBC News.

Plans to accelerate spending on 40 key projects were announced last week by Deputy Prime Minister Nick Clegg, who argued that spending on these areas would stimulate a recovery "more quickly than many supply side measures".

Some £500 million in unspent departmental budgets will be used to finance local infrastructure improvement initiatives, such as the construction of road links to allow housing developments to proceed.

However, politicians are said to be mulling over whether the current proposals go far enough and considering a potential increase in capital spending above the amounts outlined by Mr Osborne in the Budget.

One possible stumbling block in the way of a boost to investment could come from the Treasury, which is believed to be arguing that any change to its plans would result in a loss of credibility.

The news comes in the wake of a report from the CBI that claimed greater spending on infrastructure would help to kick-start growth in the UK economy.

A study of major businesses conducted as part of the publication found 58 per cent of respondents believe Britain's infrastructure is worse than its European neighbours, while just 26 per cent see the country as favourable for investment.

Despite this, businesses were largely positive about broadband services, with 73 per cent stating they have seen improvements in connectivity over the past five years.

"If we are serious about boosting exports - especially in emerging markets - and achieving sustainable growth, the government must put infrastructure investment firmly at the top of its agenda," said CBI director general John Cridland.

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