DAVID CAMERON warned yesterday that the Government’s deficit was “even worse” than thought – and the action needed to tackle it would change everyone’s way of life.

In a keynote speech on the economy, the Prime Minister accused Labour of “reckless” spending and said the public sector had to be brought “back into line”.

If drastic cuts were not implemented, the Treasury would be spending an annual £70bn on debt interest within five years – more than on schools in England, transport, and fighting climate change put together.

Speaking alongside new Treasury Chief Secretary Danny Alexander, Mr Cameron told an audience in Milton Keynes that now the Tory-Liberal Democrat coalition had been given access to the books, it was clear that the “overall scale of the problem is even worse than we thought”.

“How we deal with these things will affect our economy, our society – indeed our whole way of life,” he said.

“The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades, to come.

“I have said before that as we deal with the debt crisis, we must take the whole country with us – and I mean it.”

Mr Cameron went on: “Based on the calculations of the last government, in five years’ time the interest we are paying on our debt is predicted to be around £70bn. That is a simply staggering amount.

“Today we spend more on debt interest than we do on running schools in England. But £70bn means spending more on debt interest than we currently do on running schools in England plus climate change plus transport.

“Interest payments of £70bn mean that for every single pound you pay in tax, 10 pence would be spent on interest.”

Mr Cameron said if action was not taken immediately the ”best case scenario” was “increasingly punishing amounts of interest on our debt”, and interest rates could also be forced up.