Projects worth billions of pounds have been cancelled or suspended by the Government ahead of next week's Budget.

Treasury Chief Secretary Danny Alexander acknowledged that ministers had had to make "difficult and painful" decisions.

But he insisted the last Government had committed to spend money "it simply did not have", irresponsibly raising the hopes of many communities.

Mr Alexander said the coalition Government had also uncovered another "black hole" amounting to £1 billion of commitments where there simply was not the money to pay for them.

In a statement to MPs, he said ministers were immediately cancelling 12 projects which would have cost nearly £2 billion.

To shouts of "shame" from the Labour benches, he said they included a business loan to Sheffield Forgemasters.