The Yeovil MP said the share of the economy accounted for by the state was too high and leading to "waste and inefficiency".
The ex-Chief Secretary to the Treasury, who resigned two years ago over anscandal, has been tipped for a return to the coalition top table.
While his commitment to further cuts is likely to enhance his reputation with Tories, it could fuel Lib Dem doubts over whether he is "one of them".
However, in an interview with the Sunday Telegraph, Mr Laws said the founding fathers of the Liberal Party would approve.
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