Chancellor George Osborne has warned that a failure to follow the economic plan set out in the Spending Review would lead to "real economic crisis" for Britain, with soaring unemployment, business failures and rising mortgage interest rates.
Mr Osborne insisted that his plan - which imposes a further £11.5 billion in cuts on Government spending, imposes a welfare cap to limit social security spending and introduces new requirements on people claiming benefits - was taking Britain "from rescue to recovery".
But shadow chancellor Ed Balls questioned whether the Government's plans would deliver the promised financial savings.
Mr Balls said Labour accepted the need to reduce the cost of social security - and would consider whether it can give its backing to a controversial new seven-day wait before claiming benefits - but accused the Government of using "nasty, divisive rhetoric" to try to turn voters against welfare claimants.
Mr Osborne told BBC1's Breakfast: "Britain is moving from rescue to recovery. We are out of intensive care. It's taken longer than anyone would have hoped. That's partly because of all the things that went wrong in Britain, in our banks, but it's also because of what's happened elsewhere in the world, particularly in the eurozone.
"We face a choice as a country. We can either give up on the plan and go back into intensive care or we can go on confronting our problems and making sure Britain lives within its means. The basic fact is that Britain can't afford at the moment the size of the Government it's got, the size of the services it's got. We've got to take tough decisions about what we do about that.
"I've tried to prioritise the things that people really care about and most depend on - like the NHS and social care and schools - and also put money into the long-term things, the schools, the science and road-building and railways that are going to create an economy which creates jobs and creates income for the whole country."
Mr Balls denied that Labour was resisting moves to reduce the social security bill. He said: "In many of these areas, the Government is trying to catch up with what we have been calling for for the last three years.
"We've supported a cap on social security, we've called for the winter allowance to be taken away from the richest pensioners, we want a compulsory jobs guarantee. I want to see the social security bill coming down. That means building more affordable homes to get the housing benefit bill down.
"The reality is that we are going to have to face some very difficult decisions on public spending and on social security because of the huge deficit we are going to inherit and the failure of the Government on growth and deficit reduction and falling living standards."