Shadow home secretary Alan Johnson has accused the government of "warped priorities" over the extent of planned cuts to the Home Office budget.
Mr Johnson said that under Labour, the department's budget would have been reduced by around 12% or £1.3bn - but he claimed that this would not have affected police numbers.
Opening an opposition-led Commons debate on 8 September 2010, Mr Johnson told MPs: "So this is not an argument about whether there need to be cuts to the police budget over the next four years.
"It's an argument between a cut of 12% and, as the chancellor announced on 22 June, 25% for the Home Office which he describes as an 'unprotected department'."
In the wide-ranging debate, Mr Johnson said the Conservatives could "no longer deny" that crime had fallen during Labour's 13 years in power.
He accused Home Secretary Theresa May of failing to stand up for the Home Office during the government's Comprehensive Spending Review, which will be published next month.
"It is extraordinary that the government refuses to add policing to health, education and international development as an area requiring special consideration and it says everything you need to know about their warped priorities," he said.
He speculated that if the department's cuts reached 40%, around 60,000 police officers in England and Wales could lose their jobs.
But Mrs May hit back at Mr Johnson's claims, saying Labour was in an "utter state of denial".
She told MPs: "They are denying the legacy of the debt that they have left to this government.
"They oppose the budget cuts they themselves planned to make, and in denying their record they oppose the police reforms they once proposed."
She went on: "Let me try to shake you out of your state of denial. Police officers that are available on the streets for just 11% of the time, 900,000 violent crimes a year, 26,000 victims of crime every single day - that's the legacy of the party opposite. It will be up to this coalition government to put it right."
Policing reforms would reduce bureaucracy and return officers to the streets, Mrs May said, making them "crime-fighters not form-writers".
Mrs May also set out plans to reform the Asbo system, pledging "simpler, smarter sanctions, faster to obtain, easier to enforce and providing a strong deterrent and a real punishment".
Watch the second part of the debate