London - British Prime Minister David Cameron predicted on Friday that Britain would have a difficult year in 2011 as public spending cuts bite, but said the country must persist with his deficit-cutting plan.
The Conservative leader said his coalition government would focus relentlessly in 2011 on supporting growth and driving job creation and again called for more bank lending, particularly to small businesses.
"2011 is going to be a difficult year, as we take hard but necessary steps to sort things out," Cameron said in a New Year's message. "Together, we can make 2011 the year that Britain gets back on its feet."
The Conservative-Liberal Democrat government is cutting spending by 19% across most departments over the next four years to rein in a budget deficit of more than 10% of national output.
Britain, emerging from a banking crisis and deep recession, has yet to feel the full brunt of the cuts, which are expected to lead to the loss of around 330 000 public sector jobs.
Several student protests against higher tuition fees have ended in violence and the head of the largest trade union has raised the prospect of coordinated strikes.
Deficit plan doubts
Despite the cuts, public sector net borrowing hit a record in November, raising questions about the government's ability to keep its austerity programme on track.
Cameron said the coalition had pulled Britain out of the deficit danger zone, but a lot of the "heavy lifting" would happen in 2011.
"We have a credible plan for restoring confidence in our economy. But we have to see it through," he said.
"The plans we have in place are tough, in fact incredibly difficult, but we are clear that the alternative - indecision and delay - would mean taking unacceptable risks with our economy, our country and our people," he said.
Labour leader Ed Miliband said in his New Year message that 2011 would be a year of consequences for Britain - "consequences of the decision taken to reduce the deficit at what I believe to be an irresponsible pace and scale".
Cameron said Britain still faced a serious threat from international terrorism. Police and intelligence agencies were "working round the clock to foil plots that would do terrible harm to our people and our economy," he said.
"We must ask ourselves as a country how we are allowing the radicalisation and poisoning of the minds of some young British Muslims who then contemplate and sometimes carry out acts of sickening barbarity," Cameron said.
Britain has regularly been a focus of Islamist militant plots. In the worst attack in Britain, suicide bombers killed 52 people on the London transport network in July 2005.
Authorities charged nine men this week with conspiracy to cause explosions and preparing acts of terrorism.