In a charged political speech delivered in Kenmare last night, the PD leader described Labour as "instinctive meddlers" in economic policy and a party that would raise taxation levels.

"Labour's instincts are to oppose tax cuts and to propose tax increases, " McDowell claimed. Quoting from speeches made by the Labour leader, McDowell said, "Pat Rabbitte has stated, 'If you think Labour, you should vote Labour.' I would say that if you think Labour, you should think harder."

The Labour leader, who was addressing the same conference organised by the Dublin Economic Workshop, said his party was committed to maintaining low taxes.

However, Rabbitte said his "personal view is close to that of the Taoiseach, when he said recently that we are likely to have reached the end of the major tax-cutting agenda".

He said reductions in the tax burden during the lifetime of the next government should be targeted at people on modest incomes.

The Labour leader attacked the record of the current government in areas such as health, education and transport. "Building an airport terminal is about as complex as building a shopping centre.

Yet we allowed faction fighting and spurious ideological arguments to delay a vital piece of infrastructure at Dublin airport, " Rabbitte argued.

Rabbitte said he differed from the PD leader in his view that inequality provides incentives to individuals to better themselves.

"It is a startling fact that a child whose parents did not attend second level is 23 times more likely to live in poverty than the child of third-level graduates, " he said.