The Government was accused of "declaring war" on public services as the Chancellor unveiled billions of pounds worth of savings and a two year pay freeze for workers.
George Osborne said there will be additional current expenditure reductions of £30 billion a year by 2014/15 and further reductions in departmental spending of £17 billion by 2014/15, with unprotected departments facing an average real cut of around 25% over four years.
Public sector workers will have their pay frozen for two years, with protection for the 1.7 million earning less than £21,000, who will receive a £250 increase in both years.
The Chancellor coupled the public spending cuts with moves to reduce spending on welfare, including the introduction of a medical assessment for Disability Living Allowance from 2013, freezing child benefit for the next three years, abolition of the health in pregnancy grant from next April and restriction of the Sure Start maternity grant to the first child only.
Lone parents will also be expected to look for work when their youngest child goes to school.
The total welfare shake-up will save the country £11 billion by 2014/15, said the Government.
Dave Prentis, general secretary of Unison accused the government of "declaring war" on public services, adding: "This is the most draconian budget in decades."
Unite joint general secretary, Derek Simpson said it was the biggest attack on essential services for a generation, adding: "Today the mask slipped to reveal this Government for what it is - Tory slashers of services and friends of the rich and powerful.
"Where is the promised fairness in cutting the wages of needy households yet fighting shy of closing the tax loopholes which allow the wealthy to dodge their duty to this country? Increasing VAT is reckless - it will stop people spending, harm UK business and choke off the recovery.
"This budget is vintage Thatcher. The Lib Dems have been conned into hammering the poor, choking off investment and cuts that risk plunging this country into a longer and deeper recession. If they do not disassociate themselves from this, then the Lib Dems will have to bear the responsibility."
Bob Crow, general secretary of the Rail Maritime and Transport union said: "Despite all the hype about sharing the pain this is without a doubt a budget for the rich. The champagne corks will be popping in the City bars tonight as the bankers and speculators realise that they have got away with the biggest financial heist on the British people in the history of our nation.
"Instead of sharing the pain, it's the poorest who take the hit while the greedy elite who drove our economy over a cliff fly off to the tax havens to bank the bail-out cash that could have been used to protect jobs, schools and hospitals.
"The increase in VAT, the attacks on pensions and benefits and the pay freeze in the public sector will all hit the poorest the hardest. The VAT rise immediately hits the real cost of living hard and drains money out of the economy choking off recovery and undermining standards of living."
Paul Kenny, general secretary of the GMB, said: "This budget is an almighty gamble. It's the same old Tories squeezing the least well-off households till the pips squeak.
"It took the outgoing Labour Government over 10 years to repair and build up our public services after the years of neglect from the last time the Tories were in office. It has taken the Tories a mere six weeks since taking office to begin the demolition job on public services again."
Labour MP for Birmingham Erdington and former union official Jack Dromey said: "This cruel Budget cuts deep, hitting the least well off hardest and harming economic recovery.
"It will be Birmingham that suffers, not the leafy shires. As for the Liberal Democrats, a hollow shell of a once progressive party, never have so few let down so many for so little, a handful of ministerial cars and red boxes."
Ben Robinson of campaign group Youth Fight for Jobs said he feared the benefit cuts will hit the jobseekers allowance, and slash £2 billion from housing benefit.
Mr Prentis said: "This budget signals that the battle for Britain's public services has begun with the Government declaring war. Public sector workers will be shocked and angry that they are the innocent victims of job cuts and pay freezes.
"Freezing public sector pay when inflation is running at 5.1% and VAT is going up, will mean a real cut in living standards for millions of ordinary workers and their families, already struggling to pay rising bills.
"Nurses, social workers, midwives, paramedics, police community support officers, housing and environmental officers who provide vital public services, are amongst those who will be hit hardest by the two year pay freeze, and for local government workers this comes on top of this year's freeze.
"A 25% cut in departmental public spending will decimate our public services. The budget will do nothing to restore confidence or kick-start the recovery, but will push local economies into the ground, raising the spectre of breadline Britain."
Unite warned that working people will be hit by the freeze on child benefit and public sector pay, the increase in VAT and cuts in public spending and benefits.
TUC general secretary Brendan Barber said: "This Budget was economically dangerous and socially divisive.
"The one thing we can now say is that we are very definitely not all in this together. Those on middle and low incomes have done worse than expected, and the rich have been let off much of what they feared.
"We will all suffer from an economy that is now likely to be sluggish at best and with a double-dip recession at worst."
Labour MP John McDonnell (Hayes and Harlington) said: "The Budget is a significant redistribution of wealth from the poorest in our society to big business. Cuts in welfare benefits to children, pregnant women and the homeless are being used to fund cuts in corporation taxes for big business. Welcome to the coalition's concept of fairness."
Mark Serwotka, general secretary of the Public and Commercial Services union, said: "PCS fundamentally rejects the claim that cuts in public spending are inevitable and we do not accept they are necessary. They will force more people out of work, put our economy at even greater risk and damage essential public services that we all rely on."
Chris Keates, general secretary of the NASUWT teaching union, said: "Despite all the pre and post election rhetoric, schools and education are not protected from the swingeing 25% cut in departmental budgets over the next four years. Core services are clearly not safe in the hands of this Government."
Ms Keates said the announcement of a review into public sector pensions had been "pre-empted" because the Chancellor had already described them as unaffordable.
"The Chancellor claims that he wants evidence based policy making, yet he rejects the recommendations of independent pay review bodies, which took into account the economic climate, and imposes a two year public sector pay freeze."
Jon Skewes, director of employment relations and development at the Royal College of Midwives, said: "Midwives will be deeply concerned about the pay freeze, which is effectively a pay cut. Whilst the flat rise for lower-paid workers is welcome, this will do nothing to bring people into midwifery at a time when we are still many thousands of midwives short.
"Both parties in this coalition Government have promised to employ more midwives. This will not help them to achieve it."