A new independent Office of Budget Responsibility (OBR) will remove No 11's ability to "fiddle the figures", George Osborne has said, as he announced the emergency Budget will take place on June 22nd.
In his first major speech as chancellor, Mr Osborne told an audience at the Treasury that the OBR - a key feature of the Liberal Democrat manifesto - would be established to set growth and borrowing forecasts which all politicians could be confident in.
The chancellor blamed his two predecessors in the Treasury, Gordon Brown and Alistair Darling, for falling foul to the lure of manipulating the Treasury's economic forecasts for political gain.
"We need long-lasting change in the way we put together Budgets," Mr Osborne said.
"The temptation to fiddle the figures... has proved too great. I recognise this will create a rod for my back down the line... that is the whole point."
Sir Alan Budd, a former chief economic adviser to the Treasury, will head the OBR. It will exist on a non-statutory basis as the Bank of England's monetary policy committee did before it was enshrined in legislation.
Its establishment comes one week before the coalition announces the bulk of its plans for cutting spending in 2010/11. Mr Osborne said "significant reductions in the cost of quangos" could be expected.
"We are finding all sorts of skeletons in various cupboards and all sorts of decisions taken at the last minute," the chancellor told the Financial Times newspaper in an interview published this morning.
"By the end, the previous government was totally irresponsible and has left this country with absolutely terrible public finances."
The emergency Budget, whose date was set today for June 22nd, will outline the fiscal path to meeting the government's cost-cutting objectives.
The Lib Dems' chief secretary to the Treasury, David Law,s said the government would make an "early downpayment" towards tackling the structural deficit as he endorsed tough Tory rhetoric on the issue.
He added: "The Treasury and departments across Whitehall are now working around the clock to see how best these measures can be implemented.
"Nobody should doubt the determination of both coalition partners to take actions which is early, decisive, credible and aggressive."
Mr Osborne argued the cuts were possible "without affecting the quality of key public services".
He said the Budget would feature measures to boost enterprise, create a "fairer" tax system and "demonstrate to the world that Britain is open to business".
The Conservative manifesto had pledged that an emergency Budget would take place within 50 days of the government taking office. Mr Osborne said the June 22nd date was 42 days after the signing of the coalition agreement.