The Ministry of Justice says that funding for legal aid will remain "very generous" even after the planned cuts.
It highlighted figures showing 1,200 barristers judged to be working full time on taxpayer-funded criminal work received £100,000 each in fee income last year.
Six barristers picked up more than £500,000 each, it said.
But the Criminal Bar Association and Bar Council contest the statistics arguing that when tax and expenses are accounted for, the average barrister earns closer to £36,000 or £27,000 respectively.
In the light of today's developments, the Ministry of Justice said both G4S and Serco have decided to withdraw from the competition for rehabilitation services.
This means that neither company will play a role as a lead provider of probation services in England and Wales in this competition.
The Government said it has left open the possibility of either supplier playing a supporting role, working with smaller businesses or voluntary sector providers.
Unlike Serco, G4S has not yet agreed a position on repayment over the overcharging fiasco, although discussions are continuing.
Minister for the Cabinet Office Francis Maude said it was "good news for taxpayers" that Serco has agreed to repay £68.5 million for overcharging on criminal tagging contracts.
We are confident that the company is taking steps to address the issues which our review has identified.
Since day one this Government has been working to reform contract management and improve commercial expertise in Whitehall.
A Cabinet Office review in the overcharging of criminal tagging contracts has found no further evidence of wrongdoing or malpractice.
However the review, published today, did highlight areas of focus for different departments.
Serco has agreed to pay the Government £68.5 million after it emerged the private security firm and rival G4S overcharged for tagging offenders, some of whom were found to be dead, back in prison or overseas.
The Serious Fraud Office (SFO) previously opened a criminal investigation and a Government-wide review of all contracts held by Serco and G4S, worth £5.9 billion in total, was launched.
Serco has agreed to pay £68.5 million to the Government to reimburse money owed on the criminal tagging contract and for other costs incurred such as the investigation.
In addition, G4S has been referred to the SFO again after the Ministry of Justice uncovered further problems with two contracts for facilities management in the courts.
Private security firm Serco has agreed to repay the Government £68.5 million, excluding VAT, for overcharging on criminal tagging contracts, Justice Secretary Chris Grayling said.
Economist Vicky Pryce, who spent two months in prison earlier this year, has said that women behind bars have "special needs".
She said it was not a case of making prison "softer" for female offenders, but of minimising the wider impact and costs on society.
Pryce was sentenced to eight months in prison in March for perverting the course of justice by taking speeding points for her former husband Chris Huhne in 2003.
Labour's shadow justice secretary Sadiq Khan has described the government's prison reforms as "tinkering around the edges" of the problem.
Khan told Daybreak that it should be investing in more women's treatment centres and more smaller prisons. He said in an earlier statement: "With only a small number of scattered women’s prisons, the concept of local resettlement is almost meaningless."
When a female offender walks out of the prison gates, I want to make sure she never returns.
Keeping female prisoners as close as possible to their homes, and importantly their children, is vital if we are to help them break the pernicious cycle of re-offending.
And providing at least a year of support in the community, alongside the means to find employment on release, will give them the best possible chance to live productive, law abiding lives.
The new plan to try and tackle female offending is being set out to work alongside Transforming Rehabilitation reforms in which every offender receives 12 months of tailored support as they leave prison.
With the aim of trying to cut reoffending and trigger further falls in the female prison population, a new open unit at HMP Styal is to focus on helping women into jobs on release.
Several reports to be published later today, including The Government's response to the Justice Select Committee report on Women Offenders: After the Corston Report and the NOMS Women's Custodial Estate Review, are set to help feed in to the new approach towards tackling female offending.