David Cameron pledged a "relentless focus on growth" to help fill the hole left by the coalition's public sector cuts.
The Prime Minister insisted his policies would unleash a "new economic dynamism", urging business leaders to plough more of their profits into innovation.
But Labour leader Ed Miliband hit back immediately, accusing the Government of taking a "big gamble" by pushing through deep cuts that would destroy hundreds of thousands of jobs and act as a drag on UK plc.
And one of the most senior Liberal Democrats in the coalition, Business Secretary Vince Cable, risked embarrassing Mr Cameron by mocking his past economic judgment.
The clashes came as all three men addressed the CBI conference in central London.
Delivering his first speech to the body since entering Downing Street, Mr Cameron said ministers were determined to create the conditions in which entrepreneurs could flourish.
He stressed that the Government was still pumping cash into major capital projects despite the £81bn cuts package announced last week, and unveiled a detailed national infrastructure plan to ensure the country was not left behind by developing competitors such as China.
"When we say we're going to build a new economic dynamism, we mean it," Mr Cameron said. "In the weeks and months ahead, ministers will be developing detailed plans to turn this strategy into action."
However, Mr Miliband - delivering his first speech to the CBI since becoming Labour leader - warned it was not right to assume that "all else will flow" from deficit reduction. "I honestly have to tell this audience I fear that that is a big gamble with growth and jobs," he said.
Making his appearance at the conference yesterday afternoon, Mr Cable strongly supported the coalition's plans.