David Cameron: Cuts will axe some things 'we genuinely value'

The Prime Minister said the government would be "socially responsible" in finding massive savings across Whitehall but said it had a "duty" to cut back.

In a newspaper article, he compared Britain to a failing company and his Tory-Lib Dem coalition administration to new owners trying to make it profitable again.

Ministers are set for tussles with the Treasury as they finalise cuts of up to 40 per cent ahead of October's announcement of the spending review results.

And Mr Cameron signalled his personal backing for welfare reforms being drawn up by Work and Pensions Secretary Iain Duncan Smith - despite apparent Treasury concerns over the up-front costs. The 5.2 billion annual cost of fraud and error was "the one area of ingrained waste that out-ranks all others", he wrote - singling out the former party leader for praise.

"Many see it as a fact of British life that we have no hope of defeating. I passionately disagree. Simply shrugging our shoulders at benefit fraud is a luxury we can no longer afford."