The Conservatives have set out plans to cut waste and bureaucracy in government spending on rural affairs.

Shadow chancellor Oliver Letwin unveiled the latest segment of the party's review of government finances, led by company troubleshooter David James, on Wednesday.

His latest findings focused on the Department for Environment, Food and Rural Affairs and found scope for savings of £477 million on top of those already identified for the government by Sir Peter Gershon.

As the battle over government spending and waste hots up, the Conservatives are keen to highlight potential savings which could be used to fund other priorities or tax cuts.

James proposed axing 1,200 non-operational Defra headquarters staff, saving £52 million, and 1,286 Environment Agency staff, saving £47 million.

More savings of £210 million would come from outsourcing the work of the Rural Payments Agency, the body which pays EU subsidies to farmers, according to the Tory plans.

The party claims that the cost of delivering the cash could be cut from four per cent to one per cent of the value of the scheme by using the private sector.

And money could be saved by rationalising the Forestry Commission, merging the Food Standards Agency and the Meat Hygiene Service and disposing of the British Waterways Board’s investment property, the Tories said.

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Letwin has argued that his plans will only cut back on bureaucracy and waste in the public sector while ministers point to Gershon's conclusion that going any further than his recommendations would damage frontline public services.

But the shadow chancellor said the James review was freeing up resources for delivery.

"The James committee has already shown how, by cutting out unnecessary layers of bureaucracy and targets in the NHS, £1.725 billion can be saved for frontline services," he said.

"Today, the James committee has shown how a further half a billion pounds can be saved by cutting out flab at Defra, on top of efficiency savings identified by Gershon.

"The Conservative diet will make our public services healthier, more efficient and have a smaller appetite for people's hard earned money."

Shadow agriculture minister John Whittingdale added that the moves would benefit farms.

"Farmers have been struggling under the weight of unnecessary regulation imposed by out of touch bureaucrats in Defra," he said.

"This report highlights how we can free farmers from a large part of this burden and, at the same time, reduce the cost to the taxpayer."