Public spending cuts would “prolong the UK’s economic agony”, according to a report from the Trades Union Congress (TUC).

The study, produced for the TUC by the Association of Public Service Excellence (APSE), a local government think-tank, claimed that a 10 per cent cut in public spending would lead to roughly 200,000 public sector workers losing their jobs.

Since 29 per cent of public spending “goes into the private sector”, the authors argue that expenditure cuts would have the knock-on effect of costing jobs in the wider economy.

The study found that for every £1 of public money invested in services through direct employment and procurement of supplies, a further 64 pence was generated in the local economy.

The TUC also surveyed 2,000 public sector workers, finding that most had seen an increased demand for services such as jobseeking, debt advice and training since the recession started.

TUC general secretary Brendan Barber said “immediate and sweeping cuts would be disastrous for the economy”, stressing the importance of a strong public sector in tackling the recession.

“Sharp cuts in public spending would not only hit the most vulnerable in society, but would also hamper the chances of growth, increase the incidence of long-term unemployment and cause widespread job losses in both the public and private sectors,” Barber said.

"Unemployment is now increasing at a slower rate than many were predicting, but long-term unemployment is likely to continue rising sharply for many months to come. Cutting back on public spending would put thousands of workers at risk of permanent worklessness, risking a repeat of the enormous social and economic costs of the 1980s."