The Government sparked a row with unions and activists by announcing that pay rises in the public sector will average 2.25 per cent this year.
Chancellor Gordon Brown told MPs he was determined not to take any risks with inflation, although he added that nurses would get a higher increase.
"The public sector pay settlements will show settlements averaging just 2.25 per cent - combining fairness in pay, with more for nurses, with vigilance and discipline in the fight against inflation."
Mary Turner, president of the GMB union, said: "Gordon Brown should not undo all Labour's good work so far in public services by trying to impose a wage ceiling of 2.25 per cent on the very workers we all rely on.
"The Chancellor does not sit at the negotiating table and it's not for him to dictate what public service workers should be paid.
"Labour should be about quality public services delivered by well-trained, well-respected public servants paid a fair wage."
Left wing Labour MP John McDonnell said the Budget was for the City, not low paid workers.
"Instead of choosing to highlight the gross iniquities of fat cat city slickers and their bloated salaries and obscene Christmas bonuses the Chancellor has chosen to attack the level of public sector pay.
"A 2.25 per cent limit for public sector pay is a kick in the teeth for public sector unions and all workers who deliver our key public services."
Dr Sam Everington, deputy chairman of the British Medical Association, said: "The BMA is dismayed that, with only ten days to go, there is still no announcement on doctors'
pay from April 1. The Chancellor said in his Budget statement today that public sector pay settlements would average 2.25 per cent this year, with more than average for nurses.
"He did not mention doctors, who are also at the frontline, providing care for patients and delivering all the NHS targets.
"Doctors equally deserve a fair pay award that reflects their hard work and commitment to bringing down waiting times for patients and innovating new treatments of care. We wait with anticipation for the Government's decision."
Mark Serwotka, general secretary of the Public and Commercial Services union, said: "Pay in the civil service is amongst the lowest in the public sector. With starting salaries as little as £10,947 in areas such as the Department for International Development, many civil servants will ironically benefit from the minimum wage increase confirmed today.
"The intention to drive down public sector pay will do nothing but foster a culture of low pay and leaves little room for manoeuvre in addressing the huge pay inequalities that exist in the civil service."
Dave Prentis, general secretary of Unison, said: "It is unprecedented for Gordon Brown to be talking about likely pay increases for nurses and other health professionals in the Budget.
"Our members have been kept waiting weeks by the Department of Health to say what the Pay Review Body is recommending and what has been agreed. This paralysis in decision making means that there is no chance that staff will get their pay increase when it is due on April 1.
"Any attempt to push down public sector pay awards out-side the NHS would be counterproductive and risk under-mining targets and improvements to services."