Osborne's 'Star Chamber' at the sharp end

Westminster silhouette
Image caption The original Star Chamber was disbanded in 1640 after it was used as a method for state terror

George Osborne's new system for deciding the outcomes of the spending review, the "Star Chamber" has its roots in the 15th Century.

And what the secretive cabinet committee decides in the coming weeks will affect every family in Britain.

It determines which ministers succeed in getting money for their departments and which fail.

"You don't have any friends in the Star Chamber if you're a spending minister," says Michael Heseltine, who led first the Department of the Environment and then the Ministry of Defence in the 1980s.

"The object is to reduce your spending."

So it has a critical role in the coalition government's plans to eliminate the UK budget deficit.

Although money matters, politics is what matters most - status, prestige and power are what the process is about.

Winning or losing at the Star Chamber now preoccupies ministers and the departments they lead.

Secret trials

The committee takes its name from a court established in 1487, its title derived from the ceiling star pattern in the Palace of Westminster rooms that the committee met in.

It was initially intended to bring the noblemen who avoided the lower courts to justice, but its fame dates to the reign of Charles I in the 17th Century.

That Star Chamber became notorious for justice dispensed by henchmen of the monarch, for secret trials, and for judgment against which there were no witnesses and no right of appeal.

It was reintroduced in the 1980s when Margaret Thatcher restrained government spending. Some politicians think the modern incarnation is not entirely different.

"It was like a great arm-wrestling contest," says Virginia Bottomley, a former Conservative health secretary.

"I had to show that I was a stubborn old bat like the best of them and really do well."

It ran until 1990 and now, 20 years later, the committee is back.

Today, Chancellor George Osborne and Danny Alexander, Lib Dem Treasury Chief Secretary, are bolstered by the Foreign Secretary William Hague along with Francis Maude and Oliver Letwin - all of them close ministerial allies of the prime minister.

So the Treasury and its allies in government enjoy an in-built majority in the Star Chamber, just as monarchs did back in the 17th Century.

Nigel Lawson, chancellor under Margaret Thatcher in the 1980s, says that good government requires the Treasury to be "very strong".

"While the Treasury shouldn't have its way 100% of the time, it should have its way very nearly 100% of the time," he argues.

Image caption Former Chancellor Alistair Darling said cuts could go beyond those implemented by Thatcher

Those ministers who decide to settle their budgets quickly with the Treasury get the chance to sit on the Star Chamber.

But cabinet members fighting for all the money they can get seldom find that idea attractive.

So might veterans of the process encourage ministers today to appeal from the Star Chamber up to the cabinet?

"I wouldn't do that," says Michael Forsyth, former Conservative Scottish secretary.

"You're surrounded by colleagues who know that any concessions made to you will result in them having to find more money.

"The smart thing to do is to get the prime minister on your side."

Those campaigning to keep free milk for children under five appeared to do precisely that last month, when David Cameron put an end to suggestions that it might be abolished.

'Be prepared'

Former education secretary Gillian Shephard has a three-point plan for winning in the Star Chamber.

"First of all, be prepared. Secondly, find out from colleagues what lines are being taken. Thirdly, know - but keep secret - the point beyond which you can't go."

All coalition ministers are supposed to be signed up to administering the very tough cuts they say the country needs.

But as they prepare to face the Star Chamber they know that its often brutal decisions may well determine the government's future - and their own careers.

The stakes could not be higher.

Beyond Westminster: Inside the Star Chamber is on BBC Radio 4, 1100 BST, Saturday 4 September and afterwards will be available to listen again on iPlayer.