Government funding for the police will be cut by a fifth in real terms over the next four years, the Treasury has announced.
Chancellor George Osborne told MPs police spending will fall by 4% each year of the spending settlement, with the aim of avoiding any reduction in the visibility and availability of police on the streets.
By 2014/15, the Home Office will reduce overall resource spending by 23% in real terms, and capital spending by 49% in real terms.
Home Secretary Theresa May said: "My absolute priority, as Home Secretary, is to ensure that the UK retains its capabilities to protect the public, secure the border and tackle the terrorist threat.
"We also have a responsibility to reduce the budget deficit and the Home Office must play its part in this. I believe that by improving efficiency, driving out waste, and increasing productivity we can maintain a strong police service, a secure border and effective counter terrorism capabilities whilst delivering significant savings."
Police budgets will fall by 14% in real terms over the next four years, the Treasury said, if police authorities increase the police precept, part of the council tax, at the level forecast by the Office of Budget Responsibility.
Spending will be focused on "protecting the public and ensuring the security of our border", the Treasury said. "Counter-terrorism specific policing will be protected with a smaller percentage cut than overall police funding of 10% in real terms and we will ensure the right funding is in place to deliver a safe and secure Olympic Games in 2012," it said.
"The reforms we are introducing will make police forces more efficient and more effective. We will drive out wasteful spending and increase efficiency and productivity in the back office. We will end central bureaucracy and targets, such as the Policing Pledge, reduce the reporting requirements for stop and search and scrap the 'stop' form in its entirety. We will also modernise pay and conditions."
The Home Office's central administration budget will be reduced by 33% in real terms over the same period and its capital budget, which includes long-term assets, such as buildings and IT, will fall by 49%.
The UK Border Agency's budget will also be cut by up to one fifth.