Chancellor to unveil details of austerity drive

George Osborne is expected to warn of a "hard road" ahead as he details 83bn of reductions to tackle the deficit, which will see nearly 500,000 public sector jobs culled over the next four years.

Departments are facing budget cuts averaging 25 per cent as part of the long-awaited Comprehensive Spending Review (CSR), with the Ministry of Justice and Department of Work and Pensions set to be among the hardest hit.

Unions reacted with fury after it emerged that more than 14,000 jobs could go at the MoJ alone, most of them front-line prison and probation workers. Legal aid and the courts are also expected to be targeted.

At the DWP, there is speculation that 'universal' handouts such as child benefit and winter fuel payments could be limited to save money, on top of a major crackdown on sickness and housing benefit.

The Secretary of State, Iain Duncan Smith, is believed to have promised big savings to get the Treasury to agree to fundamental reform of the welfare system in the longer term.

Ministers have also forced the BBC to take over funding the World Service, which was previously bankrolled by the Foreign Office.

Together with a six-year freeze in the licence fee at 145.50, it means an effective 16 per cent cut in the corporation's budget.

Commuters are braced for sharp rises in train fares as the Department for Transport withdraws rail subsidies, and thousands of police officers could go as the Home Office trims costs. Meanwhile, the social housing budget is likely to be more than halved to save billions of pounds.

David Cameron announced yesterday that the Ministry of Defence had been spared the worst of the pain, with an eight per cent reduction in real terms by 2014-15.

However, that relatively modest reduction still leaves Britain unable to mount another operation on the scale of the Iraq invasion, or the current campaign in Afghanistan.

Some 17,000 armed forces and 25,000 civilian posts are due to be axed, as well as a host of significant military assets.

The least affected is thought to be the Department for Education, which has secured an overall five per cent reduction.

Even the NHS and Department for International Development, which are protected from the curbs, have been ordered to make sizeable efficiency savings to ensure that cash is not wasted.

Mr Cameron has previously warned that the cuts package, designed to eradicate the Government's structural deficit by the end of the parliament, will be "life changing" for everyone in the UK.

But there have been suggestions that much of the most painful slashing will be "backloaded" until later in the spending review period - by which time the economic recovery should be entrenched.

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, inadvertently gave a sneak preview yesterday of what is being announced in the Commons at 12.30pm.

Two pages of a briefing paper for the CSR were visible on Mr Alexander's lap as he was photographed being driven away from his office.

It said action on pay, such as the wage freeze already imposed by Mr Osborne, and flexibility over hours would help minimise redundancies among state workers.

But the document made clear that the Government had adopted the Office for Budget Responsibility's (OBR) forecast for a 490,000 reduction in the public sector workforce by 2014-15, roughly a 12th of the current total.

It indicated that the coalition was pinning its hope on stimulating the wider economy, with policies designed to "facilitate a movement of jobs from the public sector to the private sector".

Ministers will be at pains today to stress the austerity measures are "fair" and "progressive" to protect the poorest - a key demand of Lib Dems.

But the challenge the Government faces in selling that message was underlined last night with a poll suggesting only 10 per cent of people thought the rich would bear the main burden.

ComRes research for ITV News found 37 per cent believed those on middle incomes would fare worst, and 35% those on low incomes.

Some 43 per cent said the cuts were being imposed unfairly, while 38 per cent supported the coalition's approach.