A series of big departments including the Department of Trade and Industry would be abolished under Lib Dem plans to save cash.
Fewer ministers and fewer civils servants, say the Lib Dems
Treasury spokesman Matthew Taylor believes his plans could see £4bn saved by slimming down central government.
And Lib Dem trade spokesman Vincent Cable said business had to be liberated from red tape and getting rid of the DTI was key to this.
"The Liberal Democrats have never been a socialist party - we have always believed in setting people free, not cutting them down to size and this applies to business too," he said.
"The DTI, and its army of Sir Humphreys, should be scrapped."
But Treasury Chief Secretary Paul Boateng demanded to know how the Lib Dems could "scrap departments without hitting frontline services".
Mr Taylor wants any savings to be directed to frontline services like schools and hospitals.
He told delegates at the party's conference that he wants eight departments and 30 ministerial positions axed.
"The government has a weight problem - it's top heavy," Mr Taylor said during a keynote speech at the conference in Brighton.
"Government is attempting to control from the centre, but it is consistently
He added: "Confronted with problems in education and health, it sets imperfect,
insensitive targets and appoints an army of civil servants to monitor them.
"We have won the argument for extra investment in public services and we know
the extra money is going in, so why isn't anything coming out?
"Whitehall has become an unproductive couch potato, so the Liberal Democrats
are reviewing every penny the government spends."
Mr Taylor added that he aimed to identify 1% of government spending - about £4bn a year - and embark on a "ruthless cull".
Kennedy made a similar speech in July
The speech will reiterate proposals first floated by Lib Dem leader Charles Kennedy in July.
Then he said that at least eight government departments would go with the merger of the Welsh, Scotland and Northern Ireland offices with the office of the deputy prime minister becoming the department of the nations and regions.
Under the plans the Cabinet Office, the DTI, the department of culture, media and sport would all go, and the department of constitutional affairs would be added to the Home Office.
Mr Boateng said: "Yet again the Liberal
Democrats have presented a menu without prices.
"They have failed to give us any details of the savings they hope to find
from their proposals and no clear costings for their policies."