George Osborne and David Laws have set out the details of the public spending cuts planned for this year.
Speaking at a press conference at the Treasury in Whitehall this morning, the chancellor said that the aim was to bring "confidence back to the economy".
He said that in the fastest review in "recent history" the cabinet had in space on one week agreed to cut £6.25bn of "wasteful spending".
The savings are to be made in property, by cutting back on quangos and IT projects, delaying or stopping contracts and implementing a recruitment freeze in the civil service.
George Osborne said that the new government had "comprehensively demolished" the argument that it was dangerous to cut spending quickly.
"This is the first time the government has announced difficult decisions on spending, it will not be last," he said.
"We do not for its own sake, but in order to improve the quality of people's lives."
He added: "We inherited an economic mess but we will come out of it stronger."
The cuts will be made across most government departments, including £836m from the business department and £780m from the communities department.
Not included in the £6.25bn savings are those set to be made in the departments for health, international development and defence as they will be reinvested in the "front lines" of those services.
Osborne also revealed the government could now pledge to also protect spending on schools, Sure Start, and 16-19 year olds from the in-year cuts.
But he announced that the Child Trust Fund would be cut, with the money received by disabled children from the scheme diverted to provide respite care for them.
Speaking alongside the chancellor, chief secretary to the Treasury David Laws said the spending review was designed to send a "shockwave through government departments" and force them to re-asses how they spend money.
Laws said that the cabinet had to lead by example, and said that no public sector worker would be able to earn more than the prime minister's £142,500 salary without his personal approval.
Ministers will also lose their dedicated car service, and be encouraged to take public transport or walk.
The full details of the spending cuts department by department announced by Laws are as follows:
Department of Transport - £683m
Communities and Local Government - £780m
Local Government DEL - £405m
Business - £836m
Home Office - £367m
Department for Education - £670m
Ministry of Justice £325m
Law Officers Department - £18m
Foreign Office - £55m
Energy and Climate Change - £85m
Environment, Food and Rural Affairs - £162m
Culture, Media and Sport - £88m
Department for Work and Pensions - £535m
Chancellor's Departments - £451m
Cabinet Office - £79m
Devolved administrations - £704m
