Britain's public services will not face "blanket privatisation", Nick Clegg promised today.
The speech comes amid widespread concerns about the spending cuts programme, which many opponents have dubbed an ideological attack on public services.
In a bid to appease the Lib Dem rank-and-file, the deputy prime minister insisted that private companies will not be able to run schools or be favoured over public sector providers in the NHS.
Speaking at a Guardian public services summit in St Albans, the deputy prime minister said he would adopt a "hard line" against blanket privatisation.
"Replacing a public monopoly with a private monopoly achieves nothing but reduced accountability," he said.
"I categorically do not believe that private providers are inherently better than public-sector providers, and I would not support an approach to reform that implied that they were.
"So while we are opening up diversity of provision, there will be no for-profit providers in our publicly funded schools system."
The Lib Dem leader laid out his position as particularly liberal, in keeping with the intentions of great liberals of the past.
He continued: "Changing our public services means opening them up, as Beveridge, Gladstone and Lloyd George would have wanted. Power should be decentralised. Government should pay for services, not always seek to run them.
"Unlike the Conservative governments of the past, I believe you have to fund public services well. But unlike the Labour governments of the past, I believe public-sector monopolies almost never spend that money best.
Mr Clegg defended the government's plans to decentralise the NHS, arguing they are in keeping with liberal principles as they leave more power in the hands of patients.
He called for modernisation of public services, but admitted the government needed to do more to explain their position to the public.
"Because I am not just committed but devoted to our public services, as is this government," said the deputy prime minister.
The leader of the Lib Dems is under pressure from within his party following the resignation of Lord Oakeshott over the Project Merlin deal with the banks.
Adding to the fall-out, over 90 Liberal Democrat councillors signed a letter published in the Times today criticising coalition's programme of cuts, arguing it will damage frontline services.