Consultancy Watson Wyatt says that the figure of £530 billion put forward in March last year fails to take into account the long-term fall in interest rates.

In fact, the final bill could be as much as 80 per cent higher at £1 trillion, Wyatt claims.

The firm also pointed out that pensions had already become more expensive owing to increased longevity and lower returns on investment.

Senior consultant, Stephen Yeo, said: “The government is taking a rosy view of the cost of public sector pensions.

“If the private sector was allowed to use public sector methods to value their own pension liabilities, the £78 billion deficit for the companies in the FTSE 350 index would be completely wiped out.”

Watson Wyatt claims that the discount rate used when calculating the total liability should be one per cent rather than the 2.8 per cent used at present.

However, a spokesman for the treasury maintained: “What matters are the actual pension payments by government, which as a percentage of GDP are exactly the same as set out a year ago.”

Most of the government’s pension liabilities are accounted for by four areas: the NHS, teachers, armed forces and the civil service.

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