The Government was battling a growing backlash from Tory and Liberal Democrat MPs and activists over moves to scrap more than 700 school building projects.
The fiercest protests – and a foretaste of trouble ahead for Nick Clegg as the spending squeeze bites – came from the leader of the Liberal Democrat group on Liverpool Council.
Warren Bradley said he felt "physically sick" over the decision – and warned that the party could be wiped out by Labour in the north of England.
"Being in coalition should be a two-way street," he said. "There are times when Clegg has got to say to [David] Cameron: 'No more'. He described the decision to axe so much of the building programme as the "straw that has broken the camel's back" for many Liberal Democrat members.
The Liberal Democrat MP Nick Harvey, who is also the armed forces minister, warned that the coalition would suffer unless it managed to find the money elsewhere.
"Such a course of action is important to the credibility of the Government, as unnecessary delay will only breed an atmosphere of cynicism," he said in an open letter to the Education Secretary, Michael Gove.
"I accept that putting these projects on hold in light of the current deficit, or pending a review of how to achieve best value from such a programme, can be justified but that does not mean the problem of inadequate school buildings disappears," he wrote.
Mr Harvey said it was important for the morale of pupils, teachers and local communities that the "real and obvious" need for new buildings was acknowledged and "alternative mechanisms put in place at the earliest practical moment".
Four Conservative MPs have protested over the scrapping of school building schemes, with Iain Liddell-Grainger threatening to lead a delegation of constituents on Downing Street. Others are calling for a rethink on the decision to ringfence health spending, arguing that the £104bn health budget, which dwarfs spending by other parts of Whitehall, should not be immune from cuts.
Speaking at a school in Cornwall yesterday, Mr Cameron admitted that the decision to axe 715 of the 1,500 projects under the previous government's Building Schools for the Future programme would be unpopular. But he blamed Labour's economic legacy for the cuts.
"We have inherited this situation. Half of the school projects will go ahead, but half of them can't go ahead.
"We have had to announce what those are. Now that is not easy and I know it is not popular. But it is because the Labour government left the country in such a complete mess, with the biggest budget deficit in the G20."
He added: "This does not mean we cannot have more money going in for future schools, and we can do that, but it does mean we had to say very clearly these projects cannot go ahead because there isn't any money."
The Government's difficulties have been compounded by more than 20 mistakes by Mr Gove as he set out his decisions on the 1,500 projects. He apologised for the blunders, saying he accepted full responsibility for them.
Ed Balls, the former Schools Secretary, said yesterday that another four mistakes in the cuts list – relating to building projects in Lancashire, Nottinghamshire and West Yorkshire – had been uncovered.
He urged Mr Gove to withdraw his lists and called on the Public Accounts Committee to investigate the errors.
The most popular suggestion on a Treasury website asking the public for their views is for savings to be made in the international aid budget, which is also protected from cuts.