The Law Society has entered the row over revelations that the government may be planning swingeing budget cuts to the justice system.

President Paul Marsh voiced fears over the future of the Courts Service and warned justice secretary Jack Straw that legal aid is ‘already cut to the bone’. He also raised concerns about reported threats to a new computer system, which he said could imperil London’s position as the global centre for dispute resolution.

‘The courts and legal aid system have been at crisis point for some time and this could tip both into the abyss,’ he told the Gazette.

Suma Chakrabarti, permanent secretary at the Ministry of Justice, told the Commons Justice Committee on Tuesday that he has outlined plans to save £950m by 2011. However, his officials denied press reports of court closures.

Peter Handcock, director general access to justice at the MoJ, told the committee that the main savings would come by combining courts’ estates, for example by co-locating the tribunals service and HMCS.

A spokesperson for the ministry said that the department is looking for efficiencies in the current spending round, which would involve ‘some difficult decisions’. However, the savings will ‘focus relentlessly’ on protecting frontline services.

The Times reported last week that proposed cuts in the £2bn legal aid budget include ending ‘double representation’ for court hearings over children’s removal from home. A Legal Services Commission spokeswoman said: ‘There are no current or planned proposals to cut legal representation for children.’ Another £46m might come from scrapping the electronic filing and document management system for the Commercial Court, it was said.

In his letter to Straw, Marsh suggested the government look for savings by cutting the prison population.