Mr Clarke said he was determined to push the private finance initiative right across the public sector. He said the aim was to 'maximise the scope for, and use of, private finance while concentrating inevitably finite capital provision on those areas where, for whatever reason, private finance is not possible'.
'All in government need to understand that private finance is increasingly going to become the main source of growth in investment projects in the public service.'
The government had broken new ground with the PFI since its launch last year, said Mr Clarke: 'Most notably with the construction of the Heathrow Express to Heathrow Airport.'
Mr Clarke pledged to keep public sector pay 'under control' and to raise the efficiency of the public sector.
'I am all too well aware that past promises to keep inflation down and the public finances under control have gone awry. But I am not just expressing my good intentions,' he said.
He claimed the government had established an important principle for public sector pay - 'that increases should be affordable, should be financed by greater efficiency and should not be linked to the so-called going rate of inflation'.