Gordon Brown said it was important in the present economic climate that senior staff in the public sector showed leadership in the exercise of pay restraint.
Senior civil servants, NHS managers, judges, military top brass, GPs and dentists will all have their pay frozen, although other staff in the same sectors will receive wage rises.
The announcement, following recommendations from the Senior Salaries Review Body (SSRB), was criticised by unions and professional groups, with one manager calling it "gesture politics".
The FDA union attacked the Government for rejecting "modest" structural changes to the pay arrangements of senior civil servants (SCS), saying the pay freeze was an insult to hard-working staff.
General secretary Jonathan Baume said: "We recognise the grave fiscal crisis facing the country as public expenditure has spiralled out of control.
"However, the SCS comprises dedicated senior public servants whose professionalism will be essential to lifting Britain out of the economic quagmire over the coming years.
"It is simply untenable for the Government to continue freezing the pay of senior civil servants as a political device year after year."
Paul Noon, general secretary of the Prospect union, said: "There is a glaring contrast between MPs who have just awarded themselves 1.5% and the harsh treatment meted out to the Government's own staff.
"Prospect members will draw their own conclusions at the fairness of a policy which rewards the politicians while cutting the real pay of their staff."
Jon Restell, chief executive of Managers in Partnership, which represents NHS managers, said: "This announcement is another chip away at the motivation of senior managers in the NHS.
"We know that these are tough times for the British economy, and we know that senior managers must shoulder some responsibility. We hoped for fair treatment but got gesture politics."
The Prime Minister said the Government had decided to accept some, but not all, of the review body's recommendations.
A recommendation that the minimum pay for senior civil servants should increase to £61,500 and NHS managers earning less than £80,000 should have a 2.25% rise were among those rejected.
Mr Brown said: "These tough decisions complement existing measures to reduce the cost of the civil service and protect frontline services."
Following on from the freeze on the parliamentary and ministerial salaries for all Government ministers which he announced last week, he said that the curbs on public sector pay would save more than £3 billion by 2013-14.
Defence Secretary Bob Ainsworth announced that, in line with recommendations made by the review body, the basic pay of officers up to brigadier and equivalent ranks in other services would increase by 2%.
A so-called Unpleasant Living Allowance will be extended to cover service personnel at patrol bases in Afghanistan.
Justice minister Maria Eagle said recommendations covering the pay of prison governors, prison officers and other support grades in England and Wales had been accepted, including a 1% increase and an additional 0.5% for senior officers.
Salaried GPs and dentists - those employed by hospitals or other GP/dentist contractors - will get a 1% pay rise, while contractor dentists and GPs - those that run practices and may employ other people - will effectively have their pay frozen.
Health Secretary Andy Burnham said: "These pay uplifts are a good deal for the Government and the NHS. In tough times, this package targets the pay rises we can afford to make where they can do most good for patients.
"They also take full account of the need for pay restraint - especially by top earners in the public sector. The best-paid hospital doctors, along with GPs, dentists and top NHS managers, will therefore get no increases.
"However, we have taken on board the recommendations of the independent pay review bodies on lower-paid doctors at the start of their careers, who will be getting a special pay supplement."
Dr Hamish Meldrum, chairman of council at the British Medical Association, said: "The BMA is disappointed that the Government has chosen to overrule some of the recommendations of the independent pay review body.
"We are well aware of the financial climate in which this decision is being made, but the independent pay review body took these factors into account in coming to its recommendations.
"Many doctors have already undergone pay freezes or sub-inflation pay rises in recent years and today's announcement will mean a pay freeze for the most highly experienced senior doctors.
"We are particularly disappointed that the Government, in choosing to interfere with the pay review body's recommendations, has not fully taken into account the financial pressures on junior doctors in their first years of postgraduate training - who have average debts of £22,000."
Susie Sanderson, of the British Dental Association, said: "Dentists appreciate the challenging financial climate the nation finds itself in and accept that restraint in public spending is inevitable.
"But what we also know is that the cost of providing dental care has soared in recent years. This award fails to take the increasing expenses facing dentistry into account."
Graeme Leach, director of policy at the Institute of Directors, said: "With public finances in such a poor state we welcome steps to restrain wage costs in the public sector. However, if the Government is serious about tackling the deficit, it needs to freeze pay across the whole of the public sector, not just the wages of senior Whitehall officials and various public appointees."
Civil servants have been on strike for two days this week in a dispute over cuts to their redundancy pay, with more industrial action planned.
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