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The British Chambers of Commerce (BCC) and smaller local chambers from across the UK have written to Vince Cable, the Business Secretary, and Philip Hammond, the Transport Secretary, to warn them against making "hasty and ill-conceived cuts".

Without Government backing for projects such as rail expansion, the private sector will struggle to grow enough to put the economy on a sounder footing, the BCC said.

"In tackling the deficit, the Government must be careful not to damage future growth and prosperity," said David Frost, director-general of the BCC. "Rail transport is essential for supporting the future of the UK economy."

The letter identified three schemes which should be exempt from cuts after the Comprehensive Spending Review, due to be published on October 20. Those are the Northern Hub project, which will increase the number of trains per day by 40pc in the north of England; electrification; and extra rail carriages to increase UK-wide passenger capacity.

"Government must support initiatives that enable the free and easy movement of people and goods," Mr Frost said.

The private sector will also pay its "fair share," he added, through ticket sales, investment and tax contributions.

The BCC's letter was also sent to Danny Alexander, the Chief Secretary to the Treasury, who is responsible for pushing through the spending cuts.

The Department for Transport, along with nearly every other government department, has been asked to come up with savings of between 25pc and 40pc in its budget. The coalition has said it aims to reduce public spending by ^83bn over the next five years.

Begbies Traynor, the restructuring specialist, has found that the prospect of spending cuts has already begun to raise financial distress among companies most likely to be hurt by the reductions, including construction, IT, media, recruitment and business services.

The number of companies in distress is 3pc higher than last year, but before the emergency Budget, the figure was down for the year.