Chancellor George Osborne has told ITV News the government will stick to its strategy of reducing spending on welfare while putting money into infrastructure and reducing the deficit.
He denied he was at odds with Deputy Prime Minister Nick Clegg who appeared to admit in an interview that the government had made a mistake in cutting infrastructure spending to steeply.
London Mayor Boris Johnson has said the government must "junk talk of austerity" in order to boost confidence in the British economy.
In a speech to business leaders in Davos, he said the government must "recognise that the single biggest inhibitor of demand is lack of confidence".
He added: "If only some of the people in this room would invest some of the cash in their balance sheets we would see that confidence rewarded in a virtuous circle.
"This morning's news demonstrates why the Chancellor is pursuing measures now that will boost confidence, further stimulate demand and bring growth, through investment in housing, transport and infrastructure."
Leading business figures have warned that David Cameron's plans to make companies release their tax affairs could undermine the economic recovery, according to the Daily Telegraph.
The Prime Minister yesterday launched an attack on corporate tax avoidance, saying it was time for businesses to "wake up and smell the coffee" - an apparent swipe at Starbucks.
A Conservative MP wrote to all of the FTSE 100 chief executives and 52 replied.
Out of those who replied, 32 of them warned the Government against publishing details of their tax affairs.
Nicolas Sarkozy was beaten in the French presidential elections last May and many thought he would disappear into private life.There's been talk he might even move to London to avoid his rival François Hollande's proposed 75% tax on top earners.
I gather that at a dinner in Davos last night he ruled out a move to the UK and hinted strongly that he may return to politics, saying he has more work to do. News perhaps for the current leader of Sarkozy's party, Jean-François Copé.
The Prime Minister's official spokesman confirms David Cameron has held meetings with his German, Italian, Dutch, Irish, Danish and Russian counterparts in Davos.
The Prime Minister questioned the ethics of businesses who pay less than might be 'ethical' in tax at World Economic Forum in Davos.
Read the full storyPrime Minister David Cameron said the G8 would focus on "trade, tax, transparency" this year during a speech at the World Economic Forum in Davos.
Labour MP Dennis Skinner said in the House of Commons yesterday that it was "gruesome" for the Prime Minister to be "heading out of austerity-riddled Britain to wine and dine at Davos with 50 top bankers who helped to create the economic crash, several hundred tax avoiding millionaires".
Responding in the Commons, David Cameron said:
– David CameronTo be fair, I think when you see the speech I'm going to be making in Davos, in which I will be arguing we need greater transparency over tax, we need greater responsibility over the tax avoidance and tax evasion issues, we need greater transparency about companies and the land issue.
You may even find there are some things I'm going to say you might agree with.
David Cameron will call for greater international cooperation on tax evasion in a speech to the World Economic Forum at Davos.
The Prime Minister will urge leaders to work together and tackle tax evasion by multi-national companies and the super-rich.
Mr Cameron will make the issue a key focus during Britain's presidency of the G8 leading economic powers.
A Downing Street spokesman said he would not be talking about Europe in the wake of his landmark promise of a referendum.
A couple more themes emerging from Davos are that business leaders are cautiously optimistic about the coming year, but they are concerned about the referendum on Britain's membership of the EU.
