Peter Salsbury, the chief executive, said the current performance of the business was unacceptable. "We've got to move faster to catch up and get ahead," he said.
M&S stores will accept third-party credit cards from next April in a move which follows a similar decision announced by John Lewis two months ago.
M&S said it would need to increase sales by around 3 per cent to cover the associated costs, which include fees to the credit card companies and the impact on M&S's existing charge card operation.
Its sourcing policy will be overhauled to increase efficiencies and cut costs by pounds 450m within three years. This will involve increasing the proportion of goods sourced from overseas suppliers from the current 50 per cent to the high street average of 70 per cent.
Key manufacturing hubs will be established in Sri Lanka, Portugal, Morocco, the Far East and Middle East. Supply links with William Baird and Daks Simpson in the UK have already been severed and more cuts are expected.
M&S is also planning to raise pounds 400m from the sale and securitisation of non-trading properties. This will include the sale of the Gyle shopping centre near Edinburgh and the possible securitisation of the lease on its Baker Street headquarters. No sales of store freeholds are planned at present, though they have not been ruled out.
M&S needs to raise the funds to boost cash flow and help support the dividend payments. The interim dividend of 3.7p is not covered by interim earnings of just 2.1p. M&S would not comment on whether the final dividend payment would be cut.
The comments accompanied a dreadful set of interim figures which saw half-year profits fall from pounds 337m to pounds 193m if exceptional items are excluded. UK profits fell from pounds 261m to pounds 145m and the businesses in Europe, America and the Far East all recorded losses.
UK clothing sales were down by 12 per cent on an underlying basis on the same period last year. In October, sales of general merchandise were down by 0.4 per cent on last year on a like-for-like basis. Food sales were up by 0.9 per cent.
SG Securities cut its full-year profit forecast to pounds 525m and put a new 250p price target on the shares. The stock closed 5p lower at 278p yesterday. Nick Bubb, SG Securities' retail analyst, said: "They are running hard to stand still."
There was no update on the search for a new chairman to replace Sir Richard Greenbury. Recent speculation has suggested that, contrary to earlier expectations, M&S is looking to appoint a full-time executive chairman.
Mr Salsbury said M&S would need to improve its prices to compete with the new wave of discounters such as Matalan and Peacocks, which have grabbed market share at the value end of the sector. He admitted that M&S's UK clothing market share had fallen by 1.5 to 2 per cent in the past year.