British Treasury ministers were accused yesterday of being "alarmist in the extreme" by announcing that they are instructing all but a few government departments to plan for 40 per cent cuts in their budgets.

Cuts on that scale would exceed anything ever done by a democracy and would mean hundreds of thousands of public employees losing their jobs.

As long as the figure of 40 per cent sticks in people's minds, when they learn that actually the worst-affected departments are having to cut their budgets by 30 per cent or more, it will sound as if they have been spared the worst.

Today the Chief Secretary to the Treasury, Danny Alexander, was expected to announce cuts totalling £1.5 billion ($3.3 billion), with £1 billion to be slashed from the Department of Education budget. That means scrapping plans to rebuild 700 schools.

Philip Hammond, the Secretary of State for Transport, was responsible for planning budget cuts when the Tories were in Opposition.

He said yesterday that telling departments to budget for 40 per cent cuts was a way of making sure that the real target of 25 per cent on average was reached.

The health and overseas aid budgets are being spared, and two departments - education and defence - have been told they need to plan for 10 to 20 per cent cuts.

Public-sector unions warned of fierce resistance from public employees, even if the 40 per cent proves to be exaggerated.

Mark Serwotka, the general secretary of the Public and Commercial Services Union, said: "We are already drawing up plans with other public-sector unions to ensure that if the Government attacks our pensions, our jobs and public services, they will face resistance the like of which we haven't seen in this country for decades."

Home Secretary Theresa May is another Cabinet minister who has to plan for a 40 per cent budget cut, even though more than half of what her department spends goes towards the police.

But the former Home Secretary, Alan Johnson, warned it was fantasy to think that the Home Office could meet even its real target, let alone a pretend target of 40 per cent, without risking an increase in crime.