BRIGHTON (MNI) - The ruling Labour Party will seek to impose new legislation to make binding requirements on governments to be fiscally responsible, Chancellor of the Exchequer Alistair Darling and Prime Minister Gordon Brown have revealed at the start of Labour's annual party conference.

In a series of interviews, the two have sketched out the plan to enshrine fiscal responsibility in law which, under current circumstances, means the government being bound to deficit reduction.

In an interview with Darling in the Observer newspaper, the aim of the legislation is said to be to "enshrine financial stability in law."

"We will have a Fiscal Responsibility Act to deal with public finances," Brown said in a BBC interview.

Brown gave a similar line in an interview given this week in New York and published by the Sunday Telegraph.

The paper says the Fiscal Responsibility Act will be the centrepiece of the Brown government's economic fightback, following fierce criticism of the ballooning public finance deficits.

"I think people will see that we will invest for the future within sustainable public finances," Brown said.

Darling's current plan, set out in the April budget, is to almost halve the deficit over the next four years.

"It's specific and credible. No-one should be in any doubt about our determination to do this," he told the Observer.

Darling is expected to set out more details of the Fiscal Responsibility Act in his speech to the party conference Monday.

Updated growth and deficit forecasts will be published in this autumn's Pre-Budget Report.

In the April budget, public sector net borrowing (PSNB) was forecast to rise from 6.3% of GDP in 2008-09, to 12.4% in 2009-10, before falling back to 5.5% in 2013-14.

GDP was forecast to shrink by between 3.25% and 3.75% this year before rising by 1% to 1.5% next year and to grow by 3.25% to 3.75% in 2011.

Darling was cautious about the near term outlook in his Observer interview.

Growth will only be "modest" in 2010 "and there is no doubt that unemployment will keep rising this year and into next," he said.

Against this outlook, Darling warned against rapid and complete withdrawal of the stimulus measures he introduced, indicating he is unwilling to endorse any great acceleration in near term spending cuts.

Darling said the opposition Conservative Party's view that "we have recovered now so we can remove all support" is "patent nonsense".

His arguments against swingeing deficit reductions in the near term were echoed by Brown.

"To massively cut the deficit now would mean more job losses, it would mean more small businesses going under," Brown said.

Brown argued the government's fiscal stimulus is having an impact. He hinted he expected positive third quarter growth and said growth in unemployment is slowing.

"I think you will see figures pretty soon that shows the action that Britain has taken yielding effect," Brown said.

"You can see it already in the unemployment figures, because although unemployment has been rising, unemployment is between 7 and 8% in Britain and it has now passed 10% in most of the other (advanced) countries," he said.

Darling's interview with the Observer, however, drew more attention elsewhere in the media for his criticism of the fatalism of the ruling Labour Party.

Opinion polls suggest Labour is heading for defeat in the upcoming General Election, which is expected to take place in Spring or early summer next year.

Darling said the party looked as if it had lost the appetite for the fight.

"We don't look as if we have got fire in our bellies. We have got to come out fighting," he said.