Chancellor George Osborne has promised a "tough but fair" emergency Budget which would set Britain on the path to balance its books within five years.
In a statement after briefing Cabinet colleagues, Mr Osborne said the Budget aimed to protect children and pensioners and ensure that the richest bear the largest share of the burden.
He said the measures being unveiled in the House of Commons would encourage enterprise and job creation.
Prime Minister David Cameron's official spokesman said the Budget would see a "significant acceleration" in reining in Britain's record £155 billion deficit, compared with the plans of the previous Labour administration.
In his statement, Mr Osborne said: "My Budget is tough but it is fair. This is an unavoidable Budget because of the mess we have to clear up. So the coalition Government will take responsibility for balancing Britain's books within five years.
"We are going to do this fairly, protecting children and pensioners and ensuring the richest contribute the most."
He went on: "And it means getting enterprise going, because it is business, not Government, that will create the jobs of the future."
However shadow chancellor Alistair Darling issued a fresh warning that moving too swiftly to cut the deficit risked derailing the "fragile" economic recovery.
He said the situation was even more precarious now than it was when he presented his final Budget last March.
