Deputy Prime Minister Nick Clegg has dismissed claims that last month's emergency Budget will pitch Britain into a "double-dip" recession.
The DPM acknowledged that implementing the Budget's cash-saving programme will be a "painful process". But he insisted the measures announced by Chancellor George Osborne offered "pain for gain", making it "very much more likely" that the UK will see strong economic growth in the medium term.
Mr Clegg's comments came in a speech in London in which he set out his belief that Britain will be a "more liberal nation" after five years of the Conservative-Liberal Democrat coalition Government.
The Liberal Democrat leader has come under fire from some party activists since going into government with Conservatives and giving his backing to measures like an accelerated cut in state spending and a 2.5% hike in VAT, which he opposed during the election campaign.
But on Friday he faced down critics who accuse him of abandoning liberal principles, insisting that the Lib Dems remain an independent party and that their Tory partners in the coalition share their "reforming zeal".
Last month's Budget showed "the contours of a distinctly liberal approach to tax", he said, citing the increase in income tax thresholds to £7,475 and the hike in capital gains tax to 28% as "a good example of liberalism in action".
Decisive action was needed to rein in debts inherited from Labour and the Liberal Democrats stand "full-square" behind the judgment that the record deficit represented "a clear and present danger to the economic sovereignty of the nation", Mr Clegg told the Demos think-tank.
"It was called an emergency Budget for a reason," said the DPM. "It was a Budget aimed squarely at retaining democratic control over the public finances.
"As a nation, we faced a real risk of losing control of the management of our economy to unaccountable financial markets."
And he added: "Let me be crystal clear about where the Liberal Democrats stand. This was a Coalition Budget, not a Conservative Budget. The Liberal Democrats stand full-square behind the Budget judgment. There would be, to my mind, absolutely nothing liberal about handing over £70 billion to the bond markets to service the debt we inherited from the previous government."
