1 million public workers face dole queue by 2017

In a new Institute for Fiscal Studies (IFS) report, economic heavyweights said that 300,000 more public-sector jobs will be lost than the government has previously estimated due to "substantial" cuts to police, defence, transport and justice budgets.

Chancellor George Osbourne will also be forced to borrow £64 billion more than he planned for 2014-15 due to his own mismanagement of Britain's economy.

And IFS director Paul Johnson warned that the Chancellor is likely to put the NHS, benefits for pensions, school funding and overseas aid under the knife in an attempt to cut the defecit.

TUC Frances O'Grady said of the findings: "This is the direct consequence of austerity policies that have shrunk the economy and cut living standards for millions."

But she insisted that the Chancellor could set a budget for for "growth, jobs and families" and she added that even the International Monetary Fund now recognised it is "time for a new approach."

PCS union, which represents thousands of the threatened public-sector workers, said the report was evidence that the government's "economic illiteracy is making our economy worse."

A spokesman said: "Almost everyone can now see that austerity isn't working, so what we need is investment in our public services and our communities, and a serious assault on the wealthy tax-dodgers who deprive our public finances of tens of billions of pounds a year."